INTERIM REPORT 2012/2013€¦ · Interim Management Report 1st half 2012/2013 Strategic development...
Transcript of INTERIM REPORT 2012/2013€¦ · Interim Management Report 1st half 2012/2013 Strategic development...
INTERIM REPORT 2012/2013
THYSSENKRUPP AG 1ST HALF
OCTOBER 01, 2012 – MARCH 31, 2013
ThyssenKrupp in brief
ThyssenKrupp has more than 150,000 employees in around 80 countries working with passion and expertise to develop
solutions forsustainable progress. Their skills and commitment are the basis of our success. In fiscal year 2011/2012
ThyssenKrupp generated sales of €40 billion.
For us, innovations and technical progress are key factors in managing global growth and using finite resources in asustainable
way. With our engineering expertise in the areas of “Material”, “Mechanical” and “Plant”, we enable our customers to gain an
edge in the global market and manufacture innovative products in a cost- and resource-efficient way.
THYSSENKRUPP STOCK MASTER DATA
ISIN (International Stock Identification Number) DE 000 750 0001 Stock exchange Frankfurt (Prime Standard), Düsseldorf Symbols Frankfurt, Düsseldorf stock exchange TKA Reuters (Xetra trading) TKAG.DE Bloomberg (Xetra trading) TKA GY
C O N T E N T S
1 s t H A L F O C T O B E R 0 1 , 2 0 1 2 – M A R CH 3 1 , 2 0 13
I N T E R I M M A N A G E M E N T R E P O R T 02 THYSSENKRUPP IN FIGURES 03 STRATEGIC DEVELOPMENT OF THE GROUP 05 GROUP REVIEW 09 EXPECTED DEVELOPMENTS 11 BUSINESS AREA REVIEW 18 FINANCIAL POSITION 20 SUBSEQUENT EVENTS 21 THYSSENKRUPP STOCK 21 RATING 22 INNOVATIONS 22 EMPLOYEES 23 COMPLIANCE 24 MACRO AND SECTOR ENVIRONMENT 26 OPPORTUNITIES AND RISKS
C O N D E N S E D I N T E R I M F I N A N C I A L S T A T E M E N T S 29 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30 CONSOLIDATED STATEMENT OF INCOME 31 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 32 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 33 CONSOLIDATED STATEMENT OF CASH FLOWS 34 SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 45 REVIEW REPORT OF THE HALF-YEAR FINANCIAL REPORT 46 RESPONSIBILITY STATEMENT
F U R T H E R I N F O R M A T I O N 47 REPORT BY THE SUPERVISORY BOARD AUDIT COMMITTEE 48 CONTACT AND 2013/2014 DATES
This interim report was published on May 15, 2013.
Interim Management Report 1st half 2012/2013 ThyssenKrupp in figures 02
ThyssenKrupp in figures GROUP CONTINUING OPERATIONS
1st half
2011/2012 1st half
2012/2013 Change Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013 Change
Change in %
Order intake million € 20,764 19,318 (1,446) (7) 11,087 9,676 (1,411) (13)
Net sales total million € 19,791 17,939 (1,852) (9) 10,195 9,102 (1,093) (11)
EBITDA million € 1,247 698 (549) (44) 571 240 (331) (58)
EBIT million € 561 215 (346) (62) 305 (4) (309) --
EBIT margin % 2.8 1.2 (1.6) — 3.0 0.0 (3.0) —
Adjusted EBIT million € 733 470 (263) (36) 361 241 (120) (33)
Adjusted EBIT margin % 3.7 2.6 (1.1) — 3.5 2.6 (0.9) —
EBT million € 251 (110) (361) -- 149 (176) (325) --
Income/(loss) (net of tax) million € (84) (44) 40 48 (138) (77) 61 44
attributable to ThyssenKrupp AG's shareholders million € (123) (60) 63 51 (164) (89) 75 46
Basic earnings per share € (0.24) (0.12) 0.12 50 (0.32) (0.18) 0.14 44
Operating cash flow million € (1,132) 243 1,375 ++ 195 165 (30) (15)
Free cash flow million € (1,393) 705 2,098 ++ (63) (31) 32 51
Employees (March 31) 154,751 151,405 (3,346) (2) 154,751 151,405 (3,346) (2) FULL GROUP
1st half
2011/2012 1st half
2012/2013 Change Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013 Change
Change in %
Order intake million € 24,268 21,315 (2,953) (12) 13,008 10,113 (2,895) (22)
Net sales total million € 23,293 19,952 (3,341) (14) 12,155 9,540 (2,615) (22)
EBITDA million € 836 671 (165) (20) 424 226 (198) (47)
EBIT million € (585) (496) 89 15 (228) (700) (472) --
EBIT margin % (2.5) (2.5) 0.0 — (1.9) (7.3) (5.4) —
Adjusted EBIT million € 177 301 124 70 152 227 75 49
Adjusted EBIT margin % 0.8 1.5 0.7 — 1.3 2.4 1.1 —
EBT million € (915) (836) 79 9 (401) (876) (475) --
Net income/(loss) million € (1,067) (822) 245 23 (587) (852) (265) (45)
attributable to ThyssenKrupp AG's shareholders million € (1,047) (621) 426 41 (587) (656) (69) (12)
Basic earnings per share € (2.03) (1.21) 0.82 40 (1.14) (1.28) (0.14) (12)
Operating cash flow million € (1,719) 22 1,741 ++ 96 162 66 69
Free cash flow million € (2,475) 286 2,761 ++ (421) (75) 346 82
Net financial debt (March 31) million € 6,480 5,298 (1,182) (18) 6,480 5,298 (1,182) (18)
Total equity (March 31) million € 8,872 3,575 (5,297) (60) 8,872 3,575 (5,297) (60)
Employees (March 31) 170,780 155,473 (15,307) (9) 170,780 155,473 (15,307) (9) BUSINESS AREAS
Order intake (million €)
Sales (million €)
EBIT (million €)
Adjusted EBIT (million €) Employees
1st half
2011/2012 1st half
2012/2013 1st half
2011/2012 1st half
2012/2013 1st half
2011/2012 1st half
2012/2013 1st half
2011/2012 1st half
2012/2013 March 31,
2012 Sept. 30,
2012 March 31,
2013
Components Technology 3,636 2,684 3,633 2,705 297 108 231 105 31,304 28,011 27,698
Elevator Technology 3,007 3,249 2,670 2,920 231 304 274 315 46,605 47,561 48,150
Industrial Solutions 2,758 3,597 2,511 2,734 184 339 357 320 17,687 18,111 18,427
Materials Services 6,774 5,753 6,553 5,738 114 (121) 130 98 28,123 27,595 26,230
Steel Europe 5,695 5,023 5,416 4,765 123 19 132 39 28,137 27,761 27,773
Corporate 72 98 72 98 (218) (251) (221) (217) 2,895 3,084 3,127
Consolidation (1,178) (1,086) (1,064) (1,021) (170) (183) (170) (190)
Continuing operations 20,764 19,318 19,791 17,939 561 215 733 470 154,751 152,123 151,405
Order intake (million €)
Sales (million €)
EBIT (million €)
Adjusted EBIT (million €)
2nd quarter 2011/2012
2nd quarter 2012/2013
2nd quarter 2011/2012
2nd quarter 2012/2013
2nd quarter 2011/2012
2nd quarter 2012/2013
2nd quarter 2011/2012
2nd quarter 2012/2013
Components Technology 1,858 1,360 1,880 1,360 128 65 128 63
Elevator Technology 1,541 1,633 1,322 1,388 118 133 132 146
Industrial Solutions 1,665 1,595 1,202 1,428 175 198 193 180
Materials Services 3,573 2,988 3,408 2,923 74 (157) 90 58
Steel Europe 2,990 2,620 2,886 2,512 21 (10) 30 9
Corporate 39 43 37 43 (119) (139) (120) (120)
Consolidation (579) (563) (540) (552) (92) (94) (92) (95)
Continuing operations 11,087 9,676 10,195 9,102 305 (4) 361 241
As part of its strategic development program ThyssenKrupp is divesting its steelmaking and processing plants in Brazil and the USA. At September 30,
2012 the Steel Americas business area met the requirements for classification as a discontinued operation under IFRS. This had been the case for
Stainless Global since September 30, 2011; the combination of the stainless business with the Finnish company Outokumpu was successfully
completed on December 28, 2012. ThyssenKrupp now holds a 29.9% financial interest in Outokumpu which is accounted for by the equity method and
whose income effects are not included in EBIT due to its non-operating nature. At January 01, 2013 the business areas Plant Technology and Marine
Systems were combined into the new business area Industrial Solutions; since then the continuing operations comprise five business areas and
Corporate.
Interim Management Report 1st half 2012/2013 Strategic development of the Group 03
Strategic development of the Group
Global trends are leading to growing worldwide demand for consumer and capital goods, infrastructure, raw materials and
energy. However, this growing demand is set against the finite nature of natural resources. The consequences of climate
change and environmental legislation worldwide also require “better” solutions. So the world needs not just “more” but above
all “better”: more efficient use of resources, greener production processes, and more sustainable infrastructure and
consumer and capital goods. As a diversified industrial group ThyssenKrupp is firmly focused on these markets of the future
and can meet demands for both “more” and “better” in many areas. In partnership with our customers we use our leading
engineering expertise to develop technological solutions and sustainable processes and products for greater resource
efficiency.
To align the Group with these global trends we launched our strategic development program in May 2011. The pillars of this
holistic program are continuous portfolio optimization, changes in our corporate culture, leadership and structure, and a
stronger performance orientation. This will strengthen our financial base and give us freedom to strategically expand our
business activities. In the 1st half 2012/2013 we reached important milestones in the implementation of the strategic
development program:
Portfolio further optimized After the successful combination of Inoxum, the former Stainless Global business area, with the Finnish stainless steel
manufacturer Outokumpu in the 1st quarter of the current fiscal year we are now engaged in intensive negotiations on the
sale of the two Steel Americas plants. These negotiations include shareholder partner Vale, the Brazilian development bank
BNDES and Brazilian government agencies. We remain focused on signing a deal promptly. The proceeds from the sale will
significantly reduce our net financial debt.
Despite the current financial constraints we made selective growth investments in the reporting period. For example the
Elevator Technology business area strengthened its operations in the USA and Europe through various business acquisitions.
The Industrial Solutions business area expanded its presence in the naval shipbuilding sector in Australia, New Zealand and
Southeast Asia with the acquisition of an Australian engineering firm.
In addition we invested particularly in organic growth. In the Components Technology business area we expanded our
presence in Germany and above all in the growth regions Brazil, China, India and the NAFTA region. The latest example is the
investment in a new truck crankshaft factory in the Chinese metropolis of Nanjing. The factory was inaugurated in April 2013.
Efficiency gains and growth opportunities at Industrial Solutions As part of a proactive strategic focus on markets and customers the two former business areas Plant Technology and Marine
Systems were combined into the new business area Industrial Solutions on January 01, 2013. Leadership structures are
being streamlined and complexity within the Group further reduced. The capabilities of the new business area range from
patented processes and technologies and turnkey plants for the chemical and refinery industries to equipment for the cement
industry and innovative solutions for the mining and processing of raw materials. In addition Industrial Solutions is active in
naval shipbuilding and supplies production systems for the auto industry. The business area has great growth opportunities;
its leading engineering expertise in project business as well as in processes and technologies enables it to meet requirements
for “more” and “better”, both in the industrialized countries and in the growth regions.
Interim Management Report 1st half 2012/2013 Strategic development of the Group 04
Corporate program “impact 2015” on track The name impact describes the various initiatives we are pursuing to drive the strategic development of the Group. Under the
“impact 2015” program the goal is to improve performance and achieve a cumulative EBIT effect of €2 billion from
performance measures in the three fiscal years up to and including 2014/2015. We aim to achieve €500 million in the current
fiscal year and another €750 million in each of the two following years. As far as the current fiscal year is concerned we are
well on course to achieve the forecast €500 million. “impact 2015” covers all areas of the business . One example is the
purchasing program “synergize+”, aimed at achieving a sustainable reduction in material costs. The Steel Europe business
area with its program “Best in Class – reloaded” aims to make a major contribution to the savings targets of “impact 2015”
with a €500 million EBIT savings by fiscal year 2014/2015. The program is a first step in improving the Group’s European
steel operations in a difficult competitive climate and achieving the earnings, cash flow, value added and competitive profile
demanded of all areas of the Group under the strategic development program. In this connection it is intended to sell the
grain-oriented electrical steel business with plants in Gelsenkirchen, Germany, and Isbergues, France, as well as the electrical
steel operation in Nashik, India, with altogether around 1,800 employees as part of a best owner solution.
ACT creating optimum Group leadership structure with competitive costs Under the Group initiative ACT (“Achieve Change @ ThyssenKrupp”) ThyssenKrupp is optimizing its leadership and business
structure and associated processes. The aim is to change our understanding of leadership and our corporate culture in terms
of greater openness, transparency and integration, and to improve performance and efficiency throughout the Group. The
functions and structure of the Executive Board have been streamlined, and the corporate functions and corporate service
units have been reduced in number from 26 to 17 and reorganized. The processes between corporate functions, business
areas and new regional units are being standardized. In a detailed analysis of current function costs, savings and optimization
opportunities totaling around €250 million have been identified in connection with the new structures and processes in the
Group. Overall the number of employees in administrative functions in the Group worldwide is to be reduced by around 3,000
from its current level of around 15,000. In the coming months the Group will be adapted step by step to the new structure. We
plan to operate in the new structure from October 2013. Most of the effects should be realized within the next three years. In
addition, the Group’s structure will be routinely reviewed in the future as part of the annual strategy process in order to
ensure it is continuously enhanced and adapted in line with changing conditions.
Reorganization of Supervisory Board supports realignment of the Group On March 08, 2013 Dr. Gerhard Cromme stepped down as Supervisory Board Chairman of ThyssenKrupp AG and from his
seat on the Supervisory Board effective March 31, 2013. The decision facilitates a fresh start for the Supervisory Board as
well and supports the necessary changes to the Group’s leadership system and culture. In a special meeting on March 19,
2013 the Supervisory Board elected Prof. Dr. Ulrich Lehner as new Chairman of the Supervisory Board effective April 01,
2013. Prof. Lehner will reorganize the Supervisory Board in parallel with the realignment of the Group and make corporate
governance and compliance key topics of the Supervisory Board’s work in the future. Effective April 19, 2013 Dr. Kersten v.
Schenck also left the Supervisory Board. The shareholder representatives on the Supervisory Board of ThyssenKrupp AG
accepted a proposal by the nomination committee and recommended Carsten Spohr and Dr. Lothar Steinebach as new
Supervisory Board members. Both were delegated to the Supervisory Board of ThyssenKrupp AG by the Alfried Krupp von
Bohlen und Halbach Foundation effective April 19, 2013; they are not members of the board of trustees of the Alfried Krupp
von Bohlen und Halbach Foundation.
Interim Management Report 1st half 2012/2013 Group review 05
Group review
Operational and strategic milestones achieved ThyssenKrupp met its operational and strategic targets in the 2nd quarter (January 01 – March 31, 2013) and overall in the
1st half 2012/2013 (October 01, 2012 – March 31, 2013):
Adjusted EBIT from continuing operations came to €470 million in the 1st half. The 2nd quarter contributed €241 million to
this, coming in at the top end of our guidance of around €200 million and slightly higher quarter-on-quarter. All business
areas made positive contributions. The share of the capital goods operations in the 1st half was €740 million, significantly
higher than the €137 million contributed by the materials operations. Adjusted EBIT of Corporate came to €(217) million and
consolidation to €(190) million.
Free cash flow from continuing operations in the 1st half was €705 million. This represents a year-on-year improvement of
around €2.1 billion and reflects our efforts to optimize the structure of our cash flow profile. In the 2nd quarter free cash flow
was almost breakeven at €(31) million despite the interest payments typically concentrated in this quarter, and before
divestments was better quarter-on-quarter and better than our guidance.
On this basis the net financial debt of the full Group, while increasing slightly by €0.1 billion in the 2nd fiscal quarter,
decreased in total in the 1st half 2012/2013 from €5.8 billion to €5.3 billion; in the prior year we recorded an increase of
around €2.9 billion.
Taking into account the current negotiations in connection with the disposal process for Steel Americas we have come to a
new assessment of fair value less costs to sell at March 31, 2013. This has resulted in a further impairment loss of €683
million on property, plant and equipment. This book loss was the main reason for the net loss of €(822) million for the full
Group in the 1st half (net loss attributable to shareholders of ThyssenKrupp AG: €(621) million), for the decline in the equity
ratio to 9.5% and for the temporary increase in the gearing ratio (net debt to equity) to 148.2 %. With cash, cash equivalents
and committed undrawn credit lines totaling €8.0 billion at March 31, 2013 and with our balanced maturity structure,
ThyssenKrupp is solidly financed. The cash inflow from the sale of Steel Americas will significantly reduce our temporarily
increased gearing again; in addition the sale will substantially improve the earnings, cash flow, value-added and competitive
profile of the Group.
Growth in elevator and project business in a difficult climate ThyssenKrupp held up generally well in a continuing difficult macroeconomic climate in the 1st half 2012/2013; key pillars
were the solid performances of Elevator Technology and Industrial Solutions.
Order intake from continuing operations in the 1st half came to €19.3 billion, down 7% year-on-year. However there were
significant increases in the elevator business, which achieved new record order levels in each of the first two quarters, and in
particular in project business: Industrial Solutions increased its order intake by 30%. Based on this strong ordering activity,
orders in hand at Elevator Technology and Industrial Solutions rose to a record level of altogether €20.2 billion. New orders in
the components and materials businesses in the 2nd quarter were higher quarter-on-quarter following the typical seasonal
pattern but down year-on-year due to lower demand and disposals. Low volumes and above all lower prices weighed on the
steel business in Europe and global materials trading.
Interim Management Report 1st half 2012/2013 Group review 06
Sales from continuing operations decreased year-on-year by 9% to €17.9 billion. The effects of disposals and declines in the
components and materials businesses were partly offset by higher sales in the elevator and project businesses.
Including the discontinued operations Steel Americas and Stainless Global (sold December 28, 2012) the Group’s order
intake in the 1st half 2012/2013 dropped by 12% to €21.3 billion, while Group sales fell by 14% to €20.0 billion.
Adjusted EBIT of €470 million on course to meet full-year target In a difficult economic climate adjusted EBIT from continuing operations in the 1st half 2012/2013 decreased year-on-year
from €733 million to €470 million, but is on course to meet the full-year target of around €1 billion. Of the half-year figure, the
2nd quarter contributed €241 million, which was at the top end of our guidance of around €200 million and up slightly from
the prior quarter. All business areas ended the 1st half with a positive contribution; this is also true of Steel Europe, which
delivered positive adjusted EBIT in both quarters in an industry at the bottom of its cycle. Industrial Solutions made the
biggest earnings contribution.
In the more cyclical materials operations the earnings decline was mainly due to the weaker trend in prices. In the capital
goods operations profits at Industrial Solutions were down slightly temporarily, while at Components Technology they were
lower year-on-year due to disposals and lower demand. Elevator Technology increased its earnings year-on-year in both
quarters. Overall the capital goods operations delivered €740 million of adjusted EBIT, much higher than the €137 million
contributed by the materials operations. Adjusted EBIT of Corporate came to €(217) million and consolidation to €(190)
million. Adjusted EBIT margin from continuing operations in the reporting half decreased year-on-year from 3.7% to 2.6%.
Including the discontinued operations, adjusted EBIT increased from €177 million to €301 million. The main reasons for this
were the absence of losses at Stainless Global after conclusion of the sale and lower losses at Steel Americas; adjusted EBIT
margin increased from 0.8% to 1.5%.
Interim Management Report 1st half 2012/2013 Group review 07
Earnings impacted by special items In the 1st half 2012/2013 EBIT from continuing operations was impacted by net special items of €255 million. In connection
with the so-called rail cartel additional provisions totaling €207 million were recognized for identifiable risks from expected
fines and claims for damages. Further provisions were recognized for restructurings in particular at Elevator Technology,
Materials Services and Steel Europe. In addition there were severance payments to former Executive Board members at
Corporate. This was partly offset by non-operating income recorded mainly in the 2nd quarter at the shipbuilding operations
of Industrial Solutions.
ADJUSTED EBIT IN MILLION €
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
EBIT 561 215 (62) 305 (4) --
+/- Disposal losses/gains (51) (3) 94 1 2 100
+ Restructuring expense 40 45 13 8 32 300
+ Impairment 191 4 (98) 36 5 (86)
+ Other non-operating expense 20 234 ++ 11 228 ++
- Other non-operating income (28) (25) 11 0 (22) —
Adjusted EBIT 733 470 (36) 361 241 (33)
After special items, EBIT from continuing operations totaled €215 million. The prior-year figure was €561 million and was
impacted by special items of €172 million mainly in connection with the sale of the civil shipbuilding operations.
Including the discontinued operations the Group’s EBIT improved year-on-year from €(585) million to €(496) million but
remained clearly negative. The main reason for this were net negative special items of €543 million attributable to the
discontinued operations. These include €683 million negative effects from the fair value adjustment at Steel Americas and
€140 million positive special items at Stainless Global, mainly due to the provisional disposal gain.
Loss from continuing operations (net of tax) improved from €(84) million to €(44) million; the figure attributable to
shareholders of ThyssenKrupp AG improved from €(123) million to €(60) million. Earnings per share from continuing
operations came to €(0.12). The net loss of the full Group was impacted particularly by the fair value adjustment at Steel
Americas but improved from €(1,067) million in the prior year to €(822) million. The net loss attributable to shareholders of
ThyssenKrupp AG improved year-on-year from €(1,047) million to €(621) million; earnings per share came to €(1.21).
Net financial debt and cash flow We made progress with our goal of improving our cash flow profile and reducing net financial debt. The free cash flow of the
full Group increased year-on-year by €2.8 billion to €286 million. With free cash flow from continuing operations almost
breakeven before positive disposal effects in the first two quarters, cash outflow from discontinued operations was
significantly outweighed by cash inflow from the successful closing of the stainless steel transaction. The full Group’s net
financial debt at March 31, 2013 came to €5,298 million, down both from a year earlier (€6,480 million) and from September
30, 2012 (€5,800 million). Taking into account cash, cash equivalents and committed undrawn credit lines totaling €8.0
billion and our balanced maturity structure, ThyssenKrupp is solidly financed. At March 31, 2013 the gearing ratio,
temporarily increased as a result of the fair value adjustment, was 148.2%.
Interim Management Report 1st half 2012/2013 Group review 08
The net financial debt of the full Group is calculated as the difference between the cash and cash equivalents shown in the
statement of financial position plus other current financial assets, and non-current and current financial debt; the
corresponding assets intended for sale of the disposal groups and discontinued operations are also taken into account.
Bond successfully issued On February 18, 2013 ThyssenKrupp AG issued a €1.25 billion 5 ½-year bond under its €10 billion debt issuance program.
The bond was very well received by the capital market, with an order book in excess of €4 billion. In view of the good
response, the bond was increased by €0.35 billion to a total of €1.6 billion on March 05, 2013. It pays a coupon of 4.0% p.a.
at an issue price of 99.681% / 100.625%. The issue was timed to benefit from the advantageous market climate and
achieved a historically favorable coupon for a ThyssenKrupp bond. In addition it extended the maturity profile of our financial
debt and strengthened the capital market share of our financing mix. The minimum denomination of €1,000 allows retail
investors to purchase the bond on the market.
Capital expenditures In the 1st half 2012/2013 ThyssenKrupp invested a total of €719 million, €336 million less than a year earlier. €297 million of
the decline was attributable to the discontinued operations and resulted from the absence of capital spending at Stainless
Global after the disposal and from a sharp fall in capital spending at Steel Americas.
We invested €521 million in the continuing operations in the first 6 months of the current fiscal year, which was slightly less
than the prior-year figure of €560 million and well within our guidance for the full-year budget of €1.4 billion maximum. More
than half the capital spending in our continuing operations went on the capital goods businesses and here particularly on
Components Technology. The majority of the budget for our components business relates to the growth regions BIC and
NAFTA; the latest example is the investment in a new truck crankshaft factory in the Chinese metropolis of Nanjing.
Interim Management Report 1st half 2012/2013 Expected developments 09
Expected developments
Fiscal year 2012/2013 Since September 30, 2012 the Steel Americas business area has been treated as a discontinued operation – like the
Stainless Global business area before it. The following forecast therefore applies to the Group’s continuing operations; Steel
Americas is no longer included. We remain focused on signing a deal for Steel Americas promptly. The sale of Stainless
Global was closed on December 28, 2012.
Sales and earnings – From the present perspective the Group’s business performance in the 2012/2013 fiscal year will be
characterized to a very large extent by the continued absence of a global economic recovery, with an unsolved debt crisis in
particular in the euro zone and slower growth in the emerging economies.
Based on the assumption of stagnation for the most part in the core markets of our more cyclical materials and components
businesses, where in the current economic climate visibility does not extend much beyond a quarter, our expectations for
sales and adjusted EBIT compared with the prior year are currently as follows:
We expect the Group’s sales in the 2nd half to come in higher than in the 1st half, but full-year sales will be down year-on-
year (sales 2011/2012: €40.1 billion). We also expect there to be no major dislocations on the raw materials markets.
Sales lost due to portfolio measures, in particular at Steel Europe and Components Technology, will not be fully offset by
organic growth in the capital goods businesses; sales in the elevator and project businesses are already secured well into
the future by existing high order backlogs.
Assuming that the slower activity on the materials markets in the 1st half compared with the prior year continues but does
not progressively worsen, adjusted EBIT from the Group’s continuing operations should be around €1 billion (adjusted
EBIT 2011/2012: €1.4 billion).
In the capital goods operations (adjusted EBIT 2011/2012: €1.7 billion) earnings contributions from the Industrial
Solutions business area should remain largely steady. In the elevator business we expect to see an improvement in
margins and earnings. The components business will be impacted by portfolio adjustments, lower operating levels in
existing plants, startup costs of new facilities in China and India, and increasing competition for slewing bearings for wind
turbines.
Adjusted EBIT from the generally more cyclical materials activities (adjusted EBIT 2011/2012: €0.6 billion) is expected to
be lower year-on-year but clearly positive.
Our goal in the 2012/2013 fiscal year is to improve cash generation on a sustainable basis and reduce our net financial debt.
Despite the problems on the European financial markets, the associated difficult conditions, and the temporary increase in
gearing, our financing and liquidity in fiscal 2012/2013 will remain on a solid basis and able to cushion fluctuations resulting
from specific short-term macroeconomic issues. After the high capital expenditures in prior years for the major projects in
Brazil and the USA and following completion of the stainless steel transaction, we expect the full Group’s capital spending to
be well below the prior-year level.
Discontinued operations – If the discontinued operation Steel Americas were to remain in the Group for the full 2012/2013
fiscal year, we would expect negative adjusted EBIT for this operation in the low to mid three-digit million euro range. This
figure does not include depreciation expenses as these are no longer required with the classification of Steel Americas as a
discontinued operation.
Interim Management Report 1st half 2012/2013 Expected developments 10
Fiscal year 2013/2014 In the 2013/2014 fiscal year we will continue to work on the structural improvement of the Group and rigorously implement
our integrated strategic development plan to make the Group competitive and sustainable. This may include among other
things targeted growth stimulus and further portfolio optimization. Provided the economic effects of the debt crisis do not
extend into our 2013/2014 fiscal year, we expect our sales to increase with general growth in the economy. Rising sales and
structural improvements should have a correspondingly positive impact on earnings. In 2013/2014 we additionally expect
significant improvements on the earnings side as a result of the corporate programs initiated, in particular “impact 2015”,
and the continuous stimulus to efficiency provided by benchmarking. Since we additionally assume that the portfolio
measures described will be implemented, we expect an improvement in the equity and financing situation in 2013/2014.
Interim Management Report 1st half 2012/2013 Business area review 11
Business area review
Components Technology
COMPONENTS TECHNOLOGY IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Order intake million € 3,636 2,684 (26) 1,858 1,360 (27)
Sales million € 3,633 2,705 (26) 1,880 1,360 (28)
EBIT million € 297 108 (64) 128 65 (49)
EBIT margin % 8.2 4.0 — 6.8 4.8 —
Adjusted EBIT million € 231 105 (55) 128 63 (51)
Adjusted EBIT margin % 6.4 3.9 — 6.8 4.6 —
Employees (March 31) 31,304 27,698 (12) 31,304 27,698 (12)
The Components Technology business area supplies a range of high-tech components for general engineering, construction
equipment and wind turbines. In the auto sector our activities are focused on crankshafts, camshafts, steering systems,
dampers, springs, stabilizers and the assembly of axle modules.
Order intake and sales down due to disposals and lower demand As in the 1st quarter, the disposals of the previous fiscal year resulted in a structurally lower volume of business at
Components Technology in the 2nd quarter 2012/2013 and therefore in the 1st fiscal half. Order intake in the 2nd quarter
decreased year-on-year by 27% to €1.4 billion but increased slightly quarter-on-quarter. Excluding the prior-year disposals,
order intake fell by 10% as a result of lower demand. There was no turnaround in the trend in western Europe. Demand for car
and truck components remained weak. However there were positive developments on the car markets in the USA, Brazil, China
and Russia; we will increase our presence in Brazil and China through plants currently in the ramp-up phase. The market for
heavy trucks, especially in Europe, the USA and China, remained in steep decline, but there was a slight recovery in demand in
Brazil. The uncertain investment climate resulted in project deferrals in the construction and wind energy sectors, especially in
western Europe, leading to lower orders for components. In China, demand for components remained weak due to delays in
connecting existing wind turbines to the grid.
Following the trend in orders, sales also came to €1.4 billion in the 2nd quarter. This represented a 28% decrease year-on-
year, mainly due to the disposals; excluding the impact of disposals, sales fell by 11%.
EBIT in 2nd quarter up from 1st quarter but down year-on-year At €108 million in the 1st half and €65 million in the 2nd quarter, EBIT at Components Technology was down from the high
prior-year figures. Key factors were the absence of the operating profits of the US foundry group Waupaca, the slowdown in
the western European market for car and heavy truck components, and continuing weak demand in the wind energy and
infrastructure sectors. In addition the earnings figure includes startup costs of new plants and products. At ThyssenKrupp
Federn & Stabilisatoren an extensive restructuring program was launched whose initial effects could already be seen in the
2nd quarter. Adjusted EBIT of €63 million for the 2nd quarter was down year-on-year but up quarter-on-quarter.
Interim Management Report 1st half 2012/2013 Business area review 12
In Berco's undercarriage components business a restructuring program with extensive personnel measures is being
introduced to improve profitability and sustainability. The new management team will develop rationalization measures with
the active involvement of the trade unions concerned. The restructuring will form the basis to grow the company successfully,
safeguard jobs over the long term and support disposal to a best owner.
Elevator Technology
ELEVATOR TECHNOLOGY IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Orders in hand (March 31) million € 3,518 3,766 7 3,518 3,766 7
Order intake million € 3,007 3,249 8 1,541 1,633 6
Sales million € 2,670 2,920 9 1,322 1,388 5
EBIT million € 231 304 32 118 133 13
EBIT margin % 8.7 10.4 — 8.9 9.6 —
Adjusted EBIT million € 274 315 15 132 146 11
Adjusted EBIT margin % 10.3 10.8 — 10.0 10.5 —
Employees (March 31) 46,605 48,150 3 46,605 48,150 3
The Elevator Technology business area supplies passenger and freight elevators, escalators and moving walks, passenger
boarding bridges, stair and platform lifts as well as service for the entire product range. Over 900 locations worldwide form a
tight-knit sales and service network that keeps us close to customers.
Significant growth in orders and sales Elevator Technology continued its positive performance in the 1st half 2012/2013 and reported significant growth in orders
and sales in the first two quarters of the current fiscal year.
Order intake continued to show a very positive trend, particularly on the Chinese market for new installations. Appreciable
growth was also achieved on the North and South American markets. The level of business in Europe was steady overall.
Order intake was 8% higher year-on-year at €3.2 billion and reached new record highs in each of the two first quarters. Sales
were likewise driven by positive new installations business on the Asian markets. Some notable sales increases were also
reported in North and South America. Overall volumes in both the new installations and the service and modernization
businesses grew continuously. In the 1st half of the fiscal year Elevator Technology increased its sales by 9% to €2.9 billion.
In the 2nd quarter, too, sales were higher year-on-year but, typically for this time of year, down from the previous quarter
among other things due to the Chinese New Year holiday.
Earnings and margins higher year-on-year In the 1st half 2012/2013 Elevator Technology achieved EBIT of €304 million. Adjusted EBIT came to €315 million and was
higher year-on-year in the first half and each of the two first quarters. This was mainly the result of the growth in sales and
positive effects from the restructuring measures initiated in the last fiscal year among other things in Spain and at Access
Solutions in the USA. Under an extensive performance program focused on the areas production, service, growth markets,
product and regional portfolios, and M&A, we are working intensively on continuously improving earnings and margins: In the 1st
half adjusted EBIT margin rose to 10.8% from 10.3% a year earlier.
Interim Management Report 1st half 2012/2013 Business area review 13
Industrial Solutions
INDUSTRIAL SOLUTIONS IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Orders in hand (March 31) million € 13,366 16,440 23 13,366 16,440 23
Order intake million € 2,758 3,597 30 1,665 1,595 (4)
thereof Marine Systems* million € 957 227 (76) 731 45 (94)
Sales million € 2,511 2,734 9 1,202 1,428 19
thereof Marine Systems* million € 586 703 20 220 400 82
EBIT million € 184 339 84 175 198 13
EBIT margin % 7.3 12.4 — 14.6 13.9 —
Adjusted EBIT million € 357 320 (10) 193 180 (7)
Adjusted EBIT margin % 14.2 11.7 — 16.1 12.6 —
Employees (March 31) 17,687 18,427 4 17,687 18,427 4
* including other shareholdings and consolidation
Effective January 01, 2013 the former Plant Technology and Marine Systems business areas were combined into the new
Industrial Solutions business area. Industrial Solutions comprises the operating units Process Technologies (Uhde), Resource
Technologies (Polysius/Fördertechnik), Marine Systems (HDW/Blohm+Voss Naval) and System Engineering. The product
portfolio encompasses chemical plants and refineries (Process Technologies), equipment for the cement industry and
innovative solutions for the mining and extraction of raw materials (Resource Technologies), naval shipbuilding (Marine
Systems), and production systems for the auto industry (System Engineering). A range of services rounds out the portfolio.
Outstanding engineering expertise for patented processes and mechanical applications, global project management, system
integration, reliable procurement and supplier management, and a service offering meeting the highest standards form the
basis for lasting customer satisfaction.
Steep rise in order intake, order backlog at record level The markets of Industrial Solutions performed positively overall in the 1st half 2012/2013. The excellent growth in order
intake reflects the high standing of our engineering, which enables our customers to differentiate themselves by
manufacturing innovative products in a cost and resource efficient way.
Order intake was significantly higher year-on-year at €3.6 billion in total. Chemical plant construction at Process Technologies
played a key role in this. Due to low gas prices in North America, demand for fertilizer plants remains high; this will continue
to open up opportunities for further chemical plant projects in North America over the long term. In the Resource
Technologies area we benefited from strong infrastructure demand in Southeast Asia: We won a €190 million follow-up order
to expand a cement plant in Indonesia, where double-digit growth is forecast for the cement market in 2013. System
Engineering received an order for a manufacturing line for the aerospace industry – an activity we will be further expanding.
Order intake in naval shipbuilding was down from the high prior-year figure, which contained a major order. Nevertheless, the
markets of Marine Systems continue to perform positively; there are a number of promising projects worldwide, including
some in the Asia/Pacific region. To strengthen its market position in the Southeast Asian region including Australia and New
Zealand, Marine Systems acquired the Australian engineering firm Australian Marine Technologies.
The exceptionally high order backlog of €16.4 billion at March 31, 2013 continues to secure a good workload, provides
planning certainty and contributes to the prospects for growth.
In the 1st half 2012/2013 Industrial Solutions' sales were 9% higher than a year earlier at €2.7 billion, confirming the stable
upward trend.
Interim Management Report 1st half 2012/2013 Business area review 14
1st half EBIT significantly higher; adjusted EBIT down from high prior-year level EBIT amounted to €339 million in the 1st half 2012/2013, and €197 million in the 2nd quarter. This was significantly higher
than a year earlier, when EBIT was impacted by special items of €173 million.
At €320 million, adjusted EBIT in the 1st half 2012/2013 was down from the prior-year figure, which profited above all from
the reversal of project-related risk provisions in shipbuilding. Adjusted EBIT in the 2nd quarter came to €180 million. At
11.7%, adjusted EBIT margin exceeded the minimum target of 10%.
Materials Services
MATERIALS SERVICES IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Order intake million € 6,774 5,753 (15) 3,573 2,988 (16)
Sales million € 6,553 5,738 (12) 3,408 2,923 (14)
EBIT million € 114 (121) -- 74 (157) --
EBIT margin % 1.7 (2.1) — 2.2 (5.4) —
Adjusted EBIT million € 130 98 (25) 90 58 (36)
Adjusted EBIT margin % 2.0 1.7 — 2.6 2.0 —
Employees (March 31) 28,123 26,230 (7) 28,123 26,230 (7)
With 500 locations in more than 30 countries, the Materials Services business area specializes in materials distribution
including technical services.
Holding up well – thanks to broad positioning and extensive program of measures Materials Services' broad portfolio of products and services, international positioning and efficient IT, warehousing and
logistics systems paid dividends again in the 1st half 2012/2013. In an early response to the increasingly difficult market
conditions, an extensive program of measures was initiated at the end of the last fiscal year relating to inventory
management, logistics, administration, and employees. As a result, the business area's performance remained relatively
good, also in comparison with many competitors.
Order intake was down 15% at just under €5.8 billion. Sales were 12% lower at €5.7 billion, with warehouse sales of metals
slipping 3.5% to 2.6 million tons. These figures reflect the continued economic slowdown in virtually all regions and sectors
with the exception of our materials activities in North America. Despite the typical seasonal quarter-on-quarter growth in
order intake and sales in the 2nd quarter, the general spring upturn was absent – due partly to the unusually long winter.
However, we continued the successful expansion of our materials and service activities for the aerospace industry and in this
connection launched new activities in India and Tunisia.
Demand for metallurgical raw materials remained weak as a result of numerous production cutbacks and stoppages in the
steel industry. Due to the deferral of some special projects by customers in Brazil, operating levels and sales of our steel mill
services decreased year-on-year in the 1st half. Here, too, we responded at an early stage with personnel measures.
Interim Management Report 1st half 2012/2013 Business area review 15
For the "Railway/Construction" operations, with combined annual sales of around €400 million and roughly 800 employees,
we have initiated a sale process in view of limited growth prospects on the German market and increased cost pressure.
2nd quarter adjusted EBIT higher quarter-on-quarter but lower year-on-year In a difficult business environment, earnings in the 1st half 2012/2013 were down from a year earlier. Nevertheless, through
the intensification and early initiation of performance programs, Materials Services made a clear positive contribution to the
Group's earnings, with adjusted EBIT of €98 million. After special items of €219 million, mainly additional provisions for
recognizable risks from anticipated fines and claims in connection with the rail cartel, and for restructurings, EBIT in the first
half came to €(121) million. Analogously with order intake and sales, adjusted EBIT increased quarter-on-quarter to €58
million and EBIT margin to 2.0% in the 2nd quarter; however both figures were down from the year before.
Steel Europe
STEEL EUROPE IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Order intake million € 5,695 5,023 (12) 2,990 2,620 (12)
Sales million € 5,416 4,765 (12) 2,886 2,512 (13)
EBIT million € 123 19 (85) 21 (10) --
EBIT margin % 2.3 0.4 — 0.7 (0.4) —
Adjusted EBIT million € 132 39 (70) 30 9 (70)
Adjusted EBIT margin % 2.4 0.8 — 1.0 0.4 —
Employees (March 31) 28,137 27,773 (1) 28,137 27,773 (1)
The Steel Europe business area brings together the Group’s flat carbon steel activities, mainly in the European market.
Premium flat products are supplied to customers in the auto industry and other steel-using sectors. The range also includes
products for attractive specialist markets such as the packaging industry.
Orders and sales lower on account of selling prices In a persistently difficult market environment order intake, sales and shipments showed typical 2nd quarter growth quarter-
on-quarter, but were lower year-on-year on account of disposals and particularly selling prices. Overall 1st half order intake
at Steel Europe was down 12% at €5.0 billion. Excluding the construction elements business which was still contained in the
year-earlier figure, orders received were 11% lower. With order volumes level year-on-year, the reduction was due to the
lower prices at which these orders were booked. The negative trend in European spot market prices over long stretches of the
2012 calendar year affected our deals with customers with a time lag.
Sales were likewise 12% lower at around €4.8 billion; adjusted for portfolio effects the reduction was 11%. Shipments slipped
5%, but excluding disposals were roughly equal with the year before. The decrease in sales was therefore the result of lower
average selling prices, which affected all businesses. Sales to automotive manufacturers and their suppliers fell short of the
prior-year level for volume and price reasons. Business with other industrial customers and steel service centers profited in
part from an upturn in volumes, not least as a result of the inventory cycle. Shipments to the packaging, iron, sheet metal,
metal processing and tubes industries were higher than a year earlier. However, in the electrical steel area prices and
volumes remained under substantial pressure, with grain-oriented material particularly affected.
Interim Management Report 1st half 2012/2013 Business area review 16
Production cutbacks continue Crude steel production at 5.6 million tons was 4% lower year-on-year. While the output of the Group's own mills was equal
with the previous year, supplies from Hüttenwerke Krupp Mannesmann decreased by 15%. Lower operating levels also
remained necessary in the downstream rolling and coating operations, though short-time working at ThyssenKrupp Steel
Europe AG ceased at the end of January 2013. However, in electrical steel production two locations announced short-time
working in the course of the 2nd fiscal quarter.
EBIT down sharply but still positive In the 1st half 2012/2013 adjusted EBIT fell by €93 million to €39 million but remained positive in both quarters in an
industry at the bottom of its cycle. The main reason for the slide in earnings was the inadequate price situation. EBIT
amounted to €19 million. The special items of €20 million include initial provisions in connection with the "Best in Class –
reloaded" program. Against the background of the inadequate earnings situation, we are working intensively on the detailed
planning and implementation of the measures. These include the planned sale under a best-owner solution of the grain-
oriented electrical steel operation with plants in Gelsenkirchen/Germany, Isbergues/France, and the electrical steel operations
in Nashik/India.
Corporate at ThyssenKrupp AG Corporate comprises the Group's head office and the shared services activities. The Group is managed centrally by
ThyssenKrupp AG as corporate headquarters. To achieve greater global integration, ThyssenKrupp is currently overhauling
the way the Group is organized, moving towards a three-dimensional management structure (matrix organization) made up of
operating businesses, functions and regions. As part of this new management model, regional headquarters are being set up
in India, Brazil, China and Japan. The regional headquarters in North America has been fully operational since the beginning
of the fiscal year.
The shared services activities comprise Business Services (finance and human resources), IT and Real Estate including non-
operating real estate. Sales of services by Corporate companies to Group companies and external customers in the 1st half
came to €98 million, €26 million more than in the same period the year before.
EBIT slipped €33 million year-on-year to €(251) million. The deterioration was mainly the result of higher administrative
costs, including consulting expenses for major projects such as the introduction of standardized data acquisition systems and
the efficiency and restructuring program ACT. Adjusted EBIT came to €(217) million, compared with €(221) million a year
earlier.
Interim Management Report 1st half 2012/2013 Business area review 17
Steel Americas (discontinued operation)
STEEL AMERICAS IN FIGURES
1st half
2011/2012 1st half
2012/2013 Change
in % 2nd quarter 2011/2012
2nd quarter 2012/2013
Change in %
Order intake* million € 1,215 1,069 (12) 632 509 (19)
Sales* million € 1,044 989 (5) 546 501 (8)
EBIT million € (518) (782) (51) (230) (695) --
EBIT margin % — — — — — —
Adjusted EBIT million € (516) (99) 81 (228) (12) 95
Adjusted EBIT margin % — — — — — —
Employees (March 31) 4,258 4,068 (4) 4,258 4,068 (4)
* including internal orders/sales within the Group
With its steelmaking and processing plants in Brazil and the USA Steel Americas is tapping into the North American market
for premium flat steel products. As part of the strategic development program, ThyssenKrupp is to dispose of these plants. At
September 30, 2012 Steel Americas met the requirements for classification as a discontinued operation under IFRS.
Difficult business environment on North American market In the 1st half 2012/2013 order intake came to €1.1 billion, down 12% from the year before. In a difficult business
environment sales at €1.0 billion were down by 5% as a result of lower prices, while production and shipments remained
largely steady. The steel mill in Brazil produced around 1.7 million tons of slabs which it supplied to the US processing plant,
Steel Europe, and customers in Brazil and North America. Altogether Steel Americas sold 1.3 million tons of flat steel to North
American customers. 0.2 million tons of slabs were sold on the Brazilian and North American markets, and 0.3 million tons of
slabs were supplied to Steel Europe.
Steel Americas made further progress with customer certification: The certification processes were rigorously expedited in the
automotive industry and completed in the pipe & tube sector.
EBIT impacted by special items, adjusted EBIT significantly improved In the 1st half EBIT came to €(782) million, but was impacted by special items of €683 million as a result of the new fair value
estimate. Adjusted EBIT improved from €(516) million in the prior year to €(99) million. The significant improvement resulted
from progress made on the operational side – in particular with cost optimization, lower reducing agent consumption, and an
increased focus on customer segments with stronger margin potential in North America. Further factors were a successful
drive to develop new customers at the Brazilian steel mill and in this connection a positive, non-period tax effect in the 2nd
quarter. Also, classification as a discontinued operation resulted in the absence of depreciation expenses for non-current
assets, which in the 1st half 2012/2013 would have come to €205 million; these were reported in the earnings of the prior-
year period in the amount of €174 million. However, the difficult business environment on the North American market meant
that earnings remained negative, mainly as a result of unsatisfactory price levels in service center business, which is
particularly important for the startup. Inefficient utilization of capacities also weighed on earnings.
Stainless Global (discontinued operation) The merger of the Stainless Global business area with the Finnish company Outokumpu was completed on December 28,
2012. In the 1st quarter 2012/2013 up to its exit from the Group, Stainless Global achieved order intake of €1.3 billion (1st
quarter 2011/2012: €1.4 billion), sales of €1.4 billion (1st quarter 2011/2012: €1.4 billion) and EBIT of €72 million (1st
quarter 2011/2012: €(321) million).
Following the disposal of Stainless Global, the Group holds a 29.9% financial interest in Outokumpu, which is accounted for in
accordance with the equity method. The shareholding is strategically and operationally unrelated to the continuing operations
and is therefore reported under Corporate; by definition its equity income is not attributable to financial income with an
operating character and is therefore not included in EBIT.
Interim Management Report 1st half 2012/2013 Results of operations and financial position 18
Results of operations and financial position
Analysis of the statement of income At €17,939 million, net sales from continuing operations in the 1st half 2012/2013 were €1,852 million or 9% lower than in
the corresponding prior-year period. Cost of sales from continuing operations decreased at a slightly higher rate by €1,621
million or 10%. The reduction was mainly due to a sales-related decline in material expense. Gross profit from continuing
operations decreased by €231 million to €2,772 million, while gross profit margin remained unchanged at 15%.
The main contributors to the €26 million rise in research and development cost from continuing operations were the Elevator
Technology and Steel Europe business areas.
Selling expenses from continuing operations decreased by €12 million, mainly due to lower expenses for sales-related freight
and insurance charges. General and administrative expenses from continuing operations decreased by €17 million, mainly
due to lower restructuring expenses.
The €26 million rise in other income was mainly the result of higher insurance recoveries as well as subsequent income in
connection with an old order in the Industrial Solutions business area.
Other expenses from continuing operations increased by €138 million. Higher allocations to provisions, in particular for
recognizable risks from claims for damages and fines anticipated in connection with the rail cartel, were partly offset by the
absence of goodwill impairment charges recognized in the prior-year period in connection with the sale of the civil operations
of Blohm + Voss.
Other gains and losses attributable to continuing operations were €40 million lower than a year earlier. This was mainly due
to the absence of the gains on the disposal of the Xervon group and the Brazilian Automotive Systems operations recognized
in the 1st half 2011/2012.
The €58 million reduction in financing income from continuing operations was caused mainly by lower exchange rate gains in
connection with finance transactions. The €92 million decrease in financing expense from continuing operations mainly
reflected exchange rate losses in connection with finance transactions and lower interest expense for accrued pension and
similar obligations.
The loss from continuing operations (before taxes) of €110 million resulted in a tax benefit from continuing operations of €66
million in the reporting period. A year earlier the effective tax charge was impacted by once-only effects from the disposal of
the civilian shipbuilding operations.
After taking into account income taxes, the loss from continuing operations came to €44 million.
The after-tax loss from discontinued operations decreased by €205 million to €778 million. This is mainly due to the absence
of the €515 million impairment charge for Stainless Global recognized in the prior-year period and the preliminary gain of
€146 million on the disposal of the stainless steel business to Outokumpu provisionally recognized in the reporting period
pending completion of the purchase price allocation in connection with the 29.9% share in Outokumpu. This was partly offset
by €447 million higher after-tax losses at Steel Americas as a result of the valuation adjustments made in the 2nd quarter
2012/2013.
Including the after-tax loss from discontinued operations, a net loss of €822 million was posted in the reporting period,
compared with a net loss of €1,067 million a year earlier.
Losses per share based on the net loss attributable to the shareholders of ThyssenKrupp AG decreased significantly year-on-
year by €0.82 to €1.21. Losses per share from continuing operations came to €0.12, down €0.12 from a year earlier.
Interim Management Report 1st half 2012/2013 Results of operations and financial position 19
Analysis of the statement of cash flows The amounts taken into account in the statement of cash flows correspond to the item "Cash and cash equivalents" as
reported in the statement of financial position and also include the cash and cash equivalents relating to the disposal groups
including the discontinued operations until the time of their actual sale. For the reporting period and the corresponding prior-
year period the discontinued operations comprise the activities of Steel Americas and Stainless Global.
In the 1st half 2012/2013 there was a net cash inflow from operating activities of €22 million, compared with a substantial
net cash outflow of €1,719 million the year before. Cash inflow from continuing operations amounted to €243 million, an
improvement of €1,375 million from the year before. This was mainly due to a considerable improvement in funds tied up in
inventories and trade accounts receivable and payable by altogether €1,186 million. In the discontinued operations, operating
cash flow improved by €366 million to €(221) million, due in particular to improved net earnings before depreciation and
deferred taxes.
Investing activities resulted in a net cash inflow of €264 million, compared with a cash outflow of €756 million a year earlier.
In the continuing operations there was a cash inflow of €462 million, compared with a cash outflow of €261 million in the
prior-year period. The main reason for the €723 million improvement was the disposal of the stainless steel business to
Outokumpu, which after taking into account the divested cash and cash equivalents resulted in proceeds of €916 million; this
was partly offset by the absence of the proceeds from the sale of the Xervon group and the Brazilian Automotive Systems
operations recognized in the year-earlier period. In the discontinued operations the cash outflow from investing activities was
€297 million lower, above all due to reduced capital expenditure for property, plant and equipment at Steel Americas.
Free cash flow, i.e. the sum of operating cash flows and cash flows from investing activities, in the continuing operations
improved significantly year-on-year by €2,098 million to €705 million. This was mainly the result of higher cash inflow from
operating activities and the disposal of the stainless steel business. In the discontinued operations negative free cash flow
was reduced substantially to €(419) million thanks to reduced cash outflows from operating activities and investing activities.
Overall, free cash flow thus came to €286 million.
Cash inflow from financing activities in the continuing operations was €1,283 million higher at €1,731 million. Of this change,
€600 million resulted from lower cash outflows in connection with the financing of discontinued operations. The increase also
reflects a €165 million rise in financial borrowings and €252 million reduction in profit distributions mainly as a result of the
absence of dividend payments by ThyssenKrupp AG in the reporting period. There was also a cash inflow from other
financing activities of €88 million, compared with a cash outflow of €169 million the year before. This €257 million change
was mainly due to significantly reduced repayments of liabilities to associated companies and lower transfers to the factoring
company of payments received from customers for already sold receivables. Cash inflow from financing activities of
discontinued operations decreased by €585 million; this mostly reflected the €410 million reduction in funds allocated to
Steel Americas under the Group financing system. Overall cash inflow from financing activities increased by €698 million to
€2,084 million.
Analysis of the statement of financial position Compared with September 30, 2012 total assets decreased by a total of €481 million to €37,803 million. This includes a
currency translation-related increase of €135 million, mainly due to movements in the US dollar exchange rate.
Non-current assets increased by €1,881 million. This sharp rise related mainly to two transactions resulting from the
combination of Stainless Global and the Finnish stainless steel producer Outokumpu implemented at the end of 2012. In this
connection ThyssenKrupp has a financial receivable outstanding against Outokumpu; this was the main reason for a €1,214
million increase in other non-current financial assets. In addition, ThyssenKrupp has a 29.9% share in the new company; this
resulted in particular in €466 million higher investments accounted for according to the equity method. Deferred tax assets
were €222 million higher, largely as a result of the increase in tax-deductible losses in Germany and abroad.
Current assets decreased by a significant €2,362 million. Currency translation effects caused a €124 million increase.
Interim Management Report 1st half 2012/2013 Results of operations and financial position / Subsequent events 20
Inventories stood at €6,434 million on March 31, 2013, negligibly higher than on September 30, 2012. Trade accounts
receivable were €158 million lower at €4,968 million. In particular this reflected reduced receivables in connection with long-
term construction contracts in the Industrial Solutions business area. The €157 million rise in current financial assets mainly
reflected advance payments for the procurement of inventories and other advance payments.
Of the steep €2,465 million increase in cash and cash equivalents, €705 million resulted from the positive free cash flow in
the reporting period – mainly due to a €1,000 million cash inflow from Outokumpu in connection with the disposal of the
stainless steel business at the end of December 2012 – and €2,108 million from an increase in net borrowings. This was
partly offset by cash outflows of €431 million in connection with the financing of discontinued operations.
Assets held for sale decreased by €4,902 million to €4,565 million. Of this sharp reduction, €4,383 million related to the
completed disposal of Stainless Global to Outokumpu. In addition, there was a decrease of altogether €537 million at Steel
Americas as a result of the valuation adjustments carried out in the 2nd quarter 2012/2013.
Total equity at March 31, 2013 was €3,575 million, down €951 million from September 30, 2012. The main factors were the
net loss of €822 million in the reporting period and the net actuarial losses from pensions and similar obligations (€90 million
after taxes) recognized in other comprehensive income. The equity ratio fell from 11.8% to 9.5%.
Non-current liabilities increased by a net €3,076 million. This was mainly due to a €2,816 million increase in non-current
financial debt, mostly as a result of the placement of a bond with a total volume of €1,600 million in the 2nd quarter
2012/2013 and €1,173 million higher liabilities to financial institutions. The €39 million rise in accrued pension and similar
obligations resulted mainly from the updated interest rates used for the revaluation of pension and healthcare obligations at
March 31, 2013, and allocations recognized in income; this was offset above all by outpayments. Other non-current
provisions at the end of the period take into account possible effects from requirements under merger control law in
connection with the disposal of the stainless steel business to Outokumpu.
Current liabilities decreased overall by €2,606 million. Current provisions for employee benefits decreased by €58 million,
mainly due to utilization. The €191 million increase in other current provisions related in particular to recognizable risks from
claims for damages and anticipated fines in connection with the rail cartel. Current financial debt was €694 million lower,
mainly due to the repayment of a bond in February 2013.
Trade accounts payable were €99 million lower, mainly due to reductions in the Materials Services business area. Other
current financial liabilities decreased by €40 million, mainly due to lower interest amounts payable. The €521 million rise in
other current non-financial liabilities was mostly caused by higher advance payments and obligations for subsequent
production costs.
Liabilities associated with assets held for sale decreased by €2,381 million to €1,533 million, primarily due to the
aforementioned disposal of Stainless Global to Outokumpu in December 2012 (€2,323 million). In addition, reductions of €46
million in the Steel Americas business area were the result of continuing business operation.
Subsequent events
Subsequent events between the end of the 1st half reporting period (March 31, 2013) and the date of authorization for
issuance (May 10, 2013) are presented in Note 14 to the interim financial statements.
Interim Management Report 1st half 2012/2013 ThyssenKrupp stock / Rating 21
ThyssenKrupp stock
The value potential of our integrated strategic development program is currently an important factor in decisions to invest in
ThyssenKrupp’s stock. The progress achieved in implementing our Strategic Way Forward therefore had a major impact on
the stock’s performance; for much of the reporting period it outperformed the DAX and DJ STOXX indices. In particular after
the announcement of the personnel changes on the Executive Board and Supervisory Board and the completion of the sale of
the stainless steel business, the capital market responded positively to the signs of rapid cultural transformation and the
changes in the portfolio which will play an important role in significantly improving our future earning power.
However, towards the end of the 2nd quarter investors’ attention was drawn more strongly to potential balance sheet risks
arising from the implementation of necessary structural measures under our strategic development program. In addition,
compliance risks which cannot yet be reliably assessed weighed on the stock’s performance.
On March 28, 2013 at the end of the reporting period ThyssenKrupp’s share price stood at €15.87, 4% lower than on
September 30, 2012. In the same period the DAX and DJ STOXX indices gained 8% and over 10% respectively.
Rating
We have been rated by Moody’s and Standard & Poor’s since 2001 and by Fitch since 2003. In January 2013 Moody’s
lowered ThyssenKrupp’s rating from Baa3 to Ba1. At Standard & Poor’s and Moody’s our rating is therefore below investment
grade. However, Fitch confirmed our investment grade rating in December 2012 with a negative outlook. A negative outlook
means that the rating agency monitors the rating more closely and then reviews it, normally within a period of 12-18 months.
As a result of the downgrading of our rating the Group’s contractually fixed financing costs, mainly in connection with the
2009/2014 bond, will increase by a low two-digit million euro amount from June 2013.
Long-term rating
Short-term rating Outlook
Standard & Poor's BB B negative Moody's Ba1 Not Prime negative Fitch BBB- F3 negative
Interim Management Report 1st half 2012/2013 Innovations / Employees 22
Innovations
The innovative powers of our engineers are mainly focused on developing new products and services. But improving existing
products and processes is also of great importance for securing and expanding our market positions. The two examples
below show how product and process innovations deliver increased value for our customers.
Production of high-quality slewing bearings Slewing bearings from ThyssenKrupp have been used in wind turbines around the world for many years. The high quality of
these bearings is essential for smooth operation, especially in offshore installations. Our engineers have come up with a
technical innovation that improves the quality of these bearings and extends their service life. Previously, an unhardened
zone in the bearing raceway which occurs for technical reasons during the surface hardening process was treated by hand;
this job has now been automated and is performed by robots.
Improving the energy efficiency of escalators Escalator drive systems are generally designed to handle full passenger loads, and in these situations they display almost optimum
efficiency. But in real life, traffic loads vary. For example, subway escalators transport people intermittently, and department store
escalators often carry just one passenger. So it makes sense to tailor drive concepts to requirements. Our escalator experts have
developed a smart frequency converter to improve efficiency in partial-load operation when there are only a few people on the
escalator. Drive power is adjusted in line with passenger numbers, significantly reducing overall power consumption and even
permitting energy recovery in downward operation. On customer request, intermittent operation can be optimized with a start and
stop function.
Employees
On March 31, 2013 ThyssenKrupp employed 151,405 people in its continuing operations, 3,346 or 2.2% fewer than a year
earlier. As a result of restructuring measures and disposals in connection with the strategic portfolio optimization, employee
numbers decreased particularly in the Components Technology, Materials Services and Steel Europe business areas. By
contrast, the headcount increased in the Elevator Technology and Industrial Solutions business areas, where new employees
were recruited above all in Asia as well as in North, Central and South America. At the end of March 2013, Elevator
Technology employed 1,655 more people in these regions than a year earlier.
Compared with September 30, 2012, the number of employees in the continuing operations decreased by 718 or 0.5%. In
Germany the headcount fell by 538 or 0.9% to 57,909; its share in the total workforce was 38.3%. At the end of March 2013,
20.1% of all employees were based in Europe outside Germany, 12.5% in North and Central America, 12.3% in South
America, 16.0% in the Asia/Pacific region – especially China and India – and 0.8% in Africa.
Including Steel Americas, ThyssenKrupp employed 155,473 people worldwide on March 31, 2013, a year-on-year decrease
of 15,307 or 9.0%. Compared with September 30, 2012, the headcount was lower by 12,488 or 7.4%.
Interim Management Report 1st half 2012/2013 Compliance 23
Compliance
In the reporting period we continued to rigorously apply our compliance program – with the three pillars “inform”, “identify”
and “report and act” – throughout the Company, focusing mainly on prevention. Measures in the “identify” pillar were
dominated by the ongoing official investigation into the so-called rail cartel as well as the ongoing antitrust investigation into
ThyssenKrupp Steel Europe AG; more information on economic risks from this investigation is provided in the section
“Opportunities and risks”. In response to these renewed antitrust allegations, in March 2013 the Executive Board of
ThyssenKrupp AG decided to further intensify the Group’s compliance efforts. Based on the existing compliance program on
anti-corruption policy and competition law, the following three measures are being implemented under the direction of the
Chief Compliance Officer:
In parallel with our internal investigations into the steel antitrust case, our compliance work is being widened with external
support from the law firm Noerr and other external partners. This is the Executive Board’s response to the fact that despite
significant and intensive compliance measures a number of serious compliance violations have been uncovered in the
Group in recent times.
As a further supporting measure and in keeping with the cultural change initiated by the Executive Board, a temporary
amnesty program has been introduced for certain employees which will run until June 15, 2013. The aim of the amnesty
program is to receive reliable information from within the Group’s own ranks to allow compliance cases from the past to
be cleared up. For employees who disclose compliance matters voluntarily, truthfully and fully and who cooperate with the
company in investigating them, the company promises that it will not unilaterally terminate their employment or
assert/enforce damage claims, even if they themselves have committed violations of the compliance program or the
underlying laws in the past. The amnesty program represents a clear cut-off point for the Group and all employees; any
compliance violations discovered after the program ends will be dealt with rigorously and credibly in line with the Group’s
policy of zero tolerance.
Furthermore, the compliance program will be extended to include the function of an ombudsman. Dr. Dietrich Max, a
lawyer from the law firm Taylor Wessing, Düsseldorf, took on the role of compliance ombudsman for ThyssenKrupp on
April 15, 2013. In addition to supervisors, compliance officers and the whistleblower hotline, employees wishing to report
possible compliance violations can now also contact the ombudsman on behalf of ThyssenKrupp.
These measures will improve ThyssenKrupp’s compliance program on anti-corruption policy and competition law. Internal
and external examinations have verified that the program complies with legal requirements. In November 2011 it was
certified by KPMG as appropriately implemented and effective in accordance with the IDW PS 980 standard of the German
Institute of Public Auditors (IDW).
In the investigation into the so-called rail cartel launched by the Federal Cartel Office in May 2011, the first part of the
investigation – relating to rails for German rail operator Deutsche Bahn – was concluded in early July 2012 with a mutually
agreed settlement. ThyssenKrupp paid a fine of €103 million to the Federal Cartel Office. Investigations are still ongoing in
two other areas – turnouts and the so-called private market, i.e. business activities with transport operators and industrial
enterprises. In addition to the risk of further fines, ThyssenKrupp also faces claims for damages from customers. For this
reason ThyssenKrupp has set aside provisions to cover the risk of expected further fines and damages claims. More
information is provided in Note 6 to the interim financial statements.
Interim Management Report 1st half 2012/2013 Macro and sector environment 24
Macro and sector environment
General economic environment remains weak The economic environment remains extremely weak. Global economic growth slowed further in 2012. The pace of growth
slipped particularly in the final quarter, and according to current estimates the 1st quarter 2013 will show little improvement.
Global GDP is expected to expand by 3.1% in 2013, virtually unchanged from the prior year (3.0%). There continue to be
significant differences in growth between the industrialized and the emerging countries.
The industrialized nations recorded GDP growth of only 1.4% in 2012; this is expected to decline further to 1.2% in 2013.
High sovereign debt, the need for fiscal consolidation, and cautious business spending are hampering growth in particular in
the euro zone. Overall economic output fell in the 4th quarter 2012 and at the beginning of 2013. After a 0.6% decrease in
2012, GDP in the euro zone is expected to decline by a further 0.4% in 2013. The recessionary trend is particularly strong in
the southern member states. The German economy is expected to achieve moderate growth after slowing in the winter half-
year. Following 0.7% expansion in 2012, Germany’s GDP is forecast to increase by 1.0% in 2013, mainly due to continued
high consumer spending.
The US economy cooled in the final quarter of 2012, weighed down in particular by the uncertainties surrounding fiscal con-
solidation. Rising consumer and business spending is expected to contribute to growth of 1.9% in 2013, following a 2.2%
increase in the prior year. In Japan, impetus from the rebuilding process after the natural disaster is slowing, so lower GDP
growth of 1.0% is forecast after 2.0% expansion in 2012.
In the emerging countries, the hitherto mainly high pace of expansion has slowed somewhat recently. GDP growth in these
countries fell to 5.0% overall in 2012, in part due to the flat economy in Europe. Thanks to improved economic activity in
some countries of Latin America and Asia, growth will accelerate slightly to 5.2% in 2013. Stimulus will come from China and
India, where growth will quicken again – in China from 7.8% last year to 8.0% this, and in India from 5.0% to 6.0%.
Interim Management Report 1st half 2012/2013 Macro and sector environment 25
Situation in the sectors mixed Automotive – The automotive sector remains on an upward trajectory, especially in North America and China. In the USA,
year-on-year sales of cars and light trucks rose by 10% to 3.6 million in the 4th quarter 2012, and by 6% to 3.7 million
vehicles in the 1st quarter 2013. In China, demand for cars climbed by 16% to 4.1 million units in the final quarter of 2012,
and by 11% to 4.3 million vehicles in the 1st quarter 2013. By contrast, new registrations in the European Union were down
10% year-on-year to 2.7 billion cars in the final quarter of 2012, and sales in the 1st quarter 2013 fell 10% to 3.0 million
vehicles. Sales figures decreased particularly sharply in the southern EU countries. The German auto market has also been in
decline since mid-2012. In the 1st quarter 2013 alone, new registrations decreased year-on-year by 13% to 674,000 cars. As
exports declined by 9% in the same period, automotive output fell by 11%.
Following a 7% increase in global auto production to 79.0 million cars and light trucks in 2012, more vehicles are once again
forecast to roll off the production lines in 2013; we expect growth of just under 2% to 80.4 million units. The regional picture
remains very mixed. Output in China is expected to increase by 9%. In the USA, the strong prior-year growth will slow to just
under 6%. Brazilian auto production will pick up pace and grow by over 4%. Following catch-up effects last year, Japanese
car output will fall again by 4%. The vehicle market in Western Europe will weaken further. With demand subdued, output will
be 2% down from the already very low prior-year volume. Automobile production in Germany is also forecast to slip by
around 2%.
SITUATION ON IMPORTANT SALES MARKETS
2012 2013* Vehicle production, million cars and light trucks
World 79.0 80.4
Westeuropa/Türkei 13.7 13.4
Germany 5.6 5.5
USA 10.1 10.7
Japan 9.4 9.0
China 17.3 18.9
Brazil 3.1 3.3
Machinery production, real, in % versus prior year
Germany 0.9 0.0
USA 7.1 6.0
Japan (9.4) 2.0
China 11.4 12.0
Construction output, real, in % versus prior year
Germany (1.3) 1.0
USA 1.1 3.2
China 8.8 10.3
India 7.4 6.7
Demand for finishes steel, million tons
World 1,413 1,454
Germany 38 38
USA 97 99
China 646 669
* Forecast
Machinery – The machinery industry also shows a mixed regional picture. China continues to achieve double-digit growth
rates of 11% in 2012 and a forecast 12% in 2013. The US machinery sector is benefiting from higher business spending and
the positive effects of low gas prices. Accordingly, US machinery output increased by 7% last year and will expand by a
further 6% in 2013. Following a sharp decline in 2012, the Japanese machinery sector is expected to return to moderate
growth this year. By contrast, machinery output in many EU countries will continue to decline in 2013.
German machinery manufacturers increased their output by just under 1% in 2012, but only thanks to a high order backlog
from the prior year. Although orders in the 4th quarter 2012 were slightly higher year-on-year, they failed to improve further
in the first three months of 2013 – while foreign orders remained at the year-earlier level, domestic orders decreased.
Elevators and escalators fared better than the machinery sector as a whole; demand from foreign customers in particular rose
strongly. Orders in Germany’s plant construction sector declined appreciably in 2012, and there is not expected to be any
broad recovery in demand in 2013. With the economic situation hampering capital spending in many countries, we expect
production in Germany’s export-oriented machinery sector to remain unchanged in 2013.
Interim Management Report 1st half 2012/2013 Macro and sector environment / Opportunities and risks 26
Construction – The situation in the construction sector varies sharply from region to region. In the euro zone, construction
output slipped by more than 4% in 2012 as a result of the overall economic situation. There were particularly strong declines
in the southern European countries. Construction activity in the euro zone is expected to slow by a further 2% in 2013. The
German construction sector performed comparatively better. Boosted by good demand for housing construction, which
benefited from favorable financing conditions, building output was down by only 1% in 2012. With prospects for commercial
and public-sector building orders also improving, German construction activity is expected to achieve slight growth of 1% in
2013.
There were positive developments in the construction sector in the USA and in the emerging countries. In the USA, the worst
of the real estate crisis is now over and housing construction and property prices are picking up again. Following a lengthy
recession, construction output increased by 1% in 2012, with 3% growth forecast for 2013. Building activity remains strong
in India and China. In India, construction output will expand by around 7% p.a. in 2012 and 2013. China is expected to report
growth of 10% this year following a 9% improvement in 2012.
Flat carbon steel – Demand on the European flat carbon steel market recovered in the final quarter of 2012. Steel processors
and distributors started cautiously replenishing their stocks. This was done to plug specific gaps in supply, but there were no
signs of a stronger restocking trend. At the same time prices on the spot market recovered, primarily due to a significant rise
in iron ore prices. This moderate upward trend continued in the first few months of 2013, although orders received by
European steel producers were still significantly lower year-on-year. Shipments to the EU market also fell short of the prior-
year volumes. Towards the end of the 1st quarter 2013, volumes and prices came under pressure again. The US flat carbon
steel market was weaker than expected, with lower year-on-year demand in the 1st quarter 2013. As a result of continued
high supply and aggressive pricing, steel prices in the USA – which had also risen previously – started to slip again from
February 2013.
With the global economy recovering only slowly, the prospects for the finished steel market remain subdued overall. For the
EU market, we forecast that steel demand in 2013 will at best stabilize at the prior-year level of around 140 million tons.
Demand in Germany could improve slightly. In the USA, steel market growth will slow to just under 3%. Global demand for
finished steel will rise by around 3% in 2013 to 1.45 billion tons. As previously, this will mainly be driven by the emerging
countries of Asia and Latin America. However, demand growth in those countries – as already the case in 2012 – will
continue to be far lower than in earlier years. This goes in particular for China, where growth of 3.5% is forecast for 2013.
Opportunities and risks
Opportunities The global markets present ThyssenKrupp as a diversified industrial group with good opportunities to successfully market its
innovative and resource-friendly products and processes, and in particular to achieve growth with our elevator and project
businesses in the emerging countries. By systematically pursuing our corporate program impact we are aiming to improve
productivity on a sustainable basis and contribute to value enhancement in all areas of the Group. The strategic, operating
and performance-related opportunities presented in detail on pages 98-100 of our 2011/2012 Annual Report remain valid.
Interim Management Report 1st half 2012/2013 Opportunities and risks 27
Risks We see economic risks for ThyssenKrupp if the global economy does not continue to recover and the pace of growth also
slows in the emerging economies. We monitor and continuously assess economic developments – including the unsolved
debt crises in particular in the euro zone – to understand the consequences for our worldwide market prospects and enable
us to respond quickly to new developments. We use our risk management system to ensure that there are no risks that could
threaten the Group’s ability to continue as a going concern.
ThyssenKrupp manages its liquidity and credit risks proactively. The Group’s financing and liquidity remain on a secure foun-
dation in fiscal 2012/2013. At March 31, 2013 the Group had €8.0 billion in cash, cash equivalents and undrawn committed
credit lines.
Credit risks (default risks) arise from the fact that the Group is exposed to possible default by a contractual party in relation to
financial instruments, e.g. money investments. In times of crisis default risks take on additional significance; we manage
them with particular care as part of our business policy. Financial instruments used for financing are traded with specified risk
limits only with counterparties who have very good credit standing and/or who are members of a deposit guarantee scheme.
Further financial risks such as currency, interest rate and commodity price risks are reduced by the use of derivative financial
instruments. Restrictive principles regarding the choice of counterparties also apply to the use of these financial instruments.
In addition to the economic uncertainties, the market environment for the European steel industry is becoming increasingly
difficult, in particular as a result of significantly lower consumption, high raw material and energy prices, CO2 allowance
trading, and Russia’s accession to the WTO. The “Best in Class – reloaded” integrated optimization program has been
launched to counter the volume and price risks with the goal of improving the position of the Group’s European steel
operations in a difficult market environment and achieving a return to the earnings, cash flow, value added and competitive
profile required of all Group businesses under the strategic development program.
With regard to the sale process for the Steel Americas business area (discontinued operation) we remain focused on signing
a deal promptly. Until the disposal of Steel Americas is completed, the Group continues to take into account risks in particular
on the sales and procurement markets, from exchange rate fluctuations, and in connection with the ramp-up and operation of
facilities and production stages.
ThyssenKrupp’s position as a diversified industrial group with leading engineering competencies reduces sales risks from
dependency on individual markets and sectors. In addition, we complement our good and long-standing relationships with
our existing customers with the active strategic development of customers and markets, in particular in the fast-growing
emerging economies.
Following the disposal of Stainless Global, ThyssenKrupp remains exposed to risks from its 29.9% shareholding in
Outokumpu and the vendor loans granted in the transaction. In addition to the usual stainless steel market risks and
fluctuating raw material prices, these are mainly risks associated with the existing overcapacities in Europe as well as import
and price pressure from Asia.
Political events, especially in the world’s crisis regions, can result in country-specific risks for our activities. We monitor and
assess current developments continuously so that if required we can respond quickly to any deterioration in conditions.
New laws and other changes in the legal framework at national or international level could entail risks for our business
activities if they lead to higher costs or other disadvantages for ThyssenKrupp compared with our competitors. We support
the related discussion process and reduce the corresponding risks through close working contacts with the relevant
institutions.
Acting on an anonymous tip-off, the German Cartel Office is investigating ThyssenKrupp Steel Europe AG and other
companies based on an initial suspicion of price fixing for specific steel supplies to the German automotive industry and its
suppliers in a period dating back to 1998. ThyssenKrupp has launched its own investigation into the allegations with the
support of external lawyers which also includes findings from the amnesty program. More information on the amnesty
Interim Management Report 1st half 2012/2013 Opportunities and risks 28
program is provided in the “Compliance” section. Our internal investigation and the investigations by the Federal Cartel Office
are still ongoing. Significant risks for the Group’s asset, financial and earnings situation cannot be ruled out at present.
Beyond this, the detailed information contained in the risk report on pages 100-112 of our 2011/2012 Annual Report is still
valid.
We report on pending lawsuits, claims for damages and other risks in Note 6.
Condensed Interim Financial Statements 1st half 2012/2013 Consolidated statement of financial position 29
ThyssenKrupp AG Consolidated statement of financial position
ASSETS MILLION €
Note Sept. 30, 2012 March 31, 2013
Intangible assets 4,291 4,283
Property, plant and equipment 6,053 5,991
Investment property 283 277
Investments accounted for using the equity method 647 1,113
Other financial assets 85 1,299
Other non-financial assets 219 274
Deferred tax assets 1,479 1,701
Total non-current assets 13,057 14,938
Inventories, net 6,367 6,434
Trade accounts receivable 5,126 4,968
Other financial assets 289 316
Other non-financial assets 1,656 1,813
Current income tax assets 101 83
Cash and cash equivalents 2,221 4,686
Assets held for sale 02 9,467 4,565
Total current assets 25,227 22,865
Total assets 38,284 37,803
EQUITY AND LIABILITIES MILLION €
Note Sept. 30, 2012 March 31, 2013
Capital stock 1,317 1,317
Additional paid in capital 4,684 4,684
Retained earnings (2,912) (3,645)
Cumulative other comprehensive income 470 482
thereof relating to disposal groups/discontinued operations (Sept. 30, 2012: 190; March 31, 2013: 200)
Equity attributable to ThyssenKrupp AG's stockholders 3,559 2,838
Non-controlling interest 967 737
Total equity 4,526 3,575
Accrued pension and similar obligations 04 7,708 7,747
Provisions for other employee benefits 235 243
Other provisions 557 749
Deferred tax liabilities 32 59
Financial debt 5,256 8,072
Other financial liabilities 1 2
Other non-financial liabilities 8 1
Total non-current liabilities 13,797 16,873
Provisions for employee benefits 276 218
Other provisions 1,032 1,223
Current income tax liablilities 349 303
Financial debt 1,929 1,235
Trade accounts payable 3,514 3,415
Other financial liabilities 848 808
Other non-financial liabilities 8,099 8,620
Liabilities associated with assets held for sale 02 3,914 1,533
Total current liabilities 19,961 17,355
Total liabilities 33,758 34,228
Total equity and liabilities 38,284 37,803
See accompanying selected notes.
Condensed Interim Financial Statements 1st half 2012/2013 Consolidated statement of income 30
ThyssenKrupp AG Consolidated statement of income MILLION €, EARNINGS PER SHARE IN €
Note
1st half ended
March 31, 2012*
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012*
2nd quarter ended
March 31, 2013
Net sales 09 19,791 17,939 10,195 9,102
Cost of sales 10 (16,788) (15,167) (8,679) (7,716)
Gross profit 3,003 2,772 1,516 1,386
Research and development cost (97) (123) (51) (67)
Selling expenses (1,325) (1,313) (674) (667)
General and administrative expenses (984) (967) (492) (485)
Other income 81 107 36 62
Other expenses (162) (300) (28) (273)
Other gains/(losses) 59 19 (2) 18
Income/(loss) from operations 575 195 305 (26)
Income/(expense) from companies accounted for using the equity method 11 12 (3) 5 (14)
Finance income 265 207 (28) 108
Finance expenses (601) (509) (133) (244)
Financial income/(expense), net (324) (305) (156) (150)
Income/(loss) before income taxes 251 (110) 149 (176)
Income tax (expense)/income (335) 66 (287) 99
Loss from continuing operations (net of tax) (84) (44) (138) (77)
Discontinued operations (net of tax) 02 (983) (778) (449) (775)
Net loss (1,067) (822) (587) (852)
Attributable to:
ThyssenKrupp AG's stockholders (1,047) (621) (587) (656)
Non-controlling interest (20) (201) 0 (196)
Net loss (1,067) (822) (587) (852)
Basic and diluted earnings per share 12
Loss from continuing operations (attributable to ThyssenKrupp AG's stockholders) (0.24) (0.12) (0.32) (0.18)
Net loss (attributable to ThyssenKrupp AG's stockholders) (2.03) (1.21) (1.14) (1.28)
See accompanying selected notes. * Prior year figures have been adjusted (see in particular Note 2).
Condensed Interim Financial Statements 1st half 2012/2013 Consolidated statement of comprehensive income 31
ThyssenKrupp AG Consolidated statement of comprehensive income MILLION €
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Net loss (1,067) (822) (587) (852)
Items of other comprehensive income that will not be reclassified to profit or loss in future periods:
Actuarial gains/(losses) from pensions and similar obligations
Change in actuarial gains/(losses), net (434) (129) (64) 16
Tax effect 130 39 19 (5)
Net actuarial gains/(losses) from pensions and similar obligations (304) (90) (45) 11
Gains/(losses) resulting from asset ceiling
Change in gains/(losses), net (4) (8) (12) (6)
Tax effect 1 2 3 2
Net gains/(losses) resulting from asset ceiling (3) (6) (9) (4)
Share of unrealized gains/(losses) of investments accounted for using the equity-method (2) (20) 1 (14)
Subtotal of items of other comprehensive income that will not be reclassified to profit or loss in future periods: (309) (116) (53) (7)
Items of other comprehensive income that will be reclassified to profit or loss in future periods:
Foreign currency translation adjustment
Change in unrealized gains/(losses), net 157 18 (177) 200
Net realized (gains)/losses (8) 15 (1) 0
Net unrealized gains/(losses) 149 33 (178) 200
Unrealized gains/(losses) from available-for-sale financial assets
Change in unrealized gains/(losses), net 1 0 1 0
Net realized (gains)/losses 0 0 0 0
Tax effect 0 0 0 0
Net unrealized gains/(losses) 1 0 1 0
Unrealized (losses)/gains on derivative financial instruments
Change in unrealized gains/(losses), net 23 (14) (53) 7
Net realized (gains)/losses (3) 2 2 (2)
Tax effect (5) 4 14 (1)
Net unrealized gains/(losses) 15 (8) (37) 4
Share of unrealized gains/(losses) of investments accounted for using the equity-method 1 5 (12) 12
Subtotal of items of other comprehensive income that will be reclassified to profit or loss in future periods: 166 30 (226) 216
Other comprehensive income (143) (86) (279) 209
Total comprehensive income (1,210) (908) (866) (643)
Attributable to:
ThyssenKrupp AG's stockholders (1,208) (725) (824) (488)
Non-controlling interest (2) (183) (42) (155)
Total comprehensive income attributable to ThyssenKrupp AG's stockholders refers to:
Continuing operations (342) (166) (325) 31
Discontinued operations (866) (559) (499) (519)
See accompanying selected notes.
Condensed Interim Financial Statements 1st half 2012/2013 Consolidated statement of changes in equity 32
ThyssenKrupp Consolidated statement of changes in equity MILLION € (EXCEPT NUMBER OF SHARES)
Number of shares
outstanding
Equity attributable to ThyssenKrupp AG's stockholders
Non-controlling
interest Total
equity
Cumulative other comprehensive income
Capital stock
Additional paid
in capital Retained earnings
Foreign currency
translation adjustment
Available-for-sale financial
assets
Derivative financial
instruments
Share of investments
accounted for using the
equity method Total
Balance as of Sept. 30, 2011 514,489,044 1,317 4,684 2,833 170 2 (22) 28 9,012 1,370 10,382
Net loss (1,047) (1,047) (20) (1,067)
Other comprehensive income (309) 133 1 13 1 (161) 18 (143)
Total comprehensive income (1,356) 133 1 13 1 (1,208) (2) (1,210)
Profit attributable to non-controlling interest 0 (48) (48)
Dividend payment (232) (232) 0 (232)
Other changes (10) (10) (10) (20)
Balance as of March 31, 2012 514,489,044 1,317 4,684 1,235 303 3 (9) 29 7,562 1,310 8,872
Balance as of Sept. 30, 2012 514,489,044 1,317 4,684 (2,912) 463 7 (32) 32 3,559 967 4,526
Net loss (621) (621) (201) (822)
Other comprehensive income (116) 21 0 (14) 5 (104) 18 (86)
Total comprehensive income (737) 21 0 (14) 5 (725) (183) (908)
Profit attributable to non-controlling interest 0 (28) (28)
Other changes 4 4 (19) (15)
Balance as of March 31, 2013 514,489,044 1,317 4,684 (3,645) 484 7 (46) 37 2,838 737 3,575
See accompanying selected notes.
Condensed Interim Financial Statements 1st half 2012/2013 Consolidated statement of cash flows 33
ThyssenKrupp Consolidated statement of cash flows MILLION €
1st half ended
March 31, 2012*
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012*
2nd quarter ended
March 31, 2013
Net loss (1,067) (822) (587) (852)
Adjustments to reconcile net loss to operating cash flows:
Discontinued operations (net of tax) 983 778 449 775
Deferred income taxes, net 29 (283) 116 (197)
Depreciation, amortization and impairment of non-current assets 693 489 269 247
Reversals of impairment losses of non-current assets (1) (1) 0 (1)
(Income)/loss from companies accounted for using the equity method, net of dividends received (11) 2 (5) 14
(Gain)/loss on disposal of non-current assets, net (62) (19) 0 (17)
Changes in assets and liabilities, net of effects of acquisitions and divestitures and other non-cash changes:
- inventories (331) (93) 278 160
- trade accounts receivable (409) 166 (526) (325)
- accrued pension and similar obligations (140) (120) (59) (42)
- other provisions (170) 328 (39) 209
- trade accounts payable (461) (88) 86 126
- other assets/liabilities not related to investing or financing activities (185) (94) 213 68
Operating cash flows - continuing operations (1,132) 243 195 165
Operating cash flows - discontinued operations (587) (221) (99) (3)
Operating cash flows - total (1,719) 22 96 162
Purchase of investments accounted for using the equity method and non-current financial assets (18) (1) (8) (1)
Expenditures for acquisitions of consolidated companies net of cash acquired (39) (6) 0 (5)
Capital expenditures for property, plant and equipment (inclusive of advance payments) and investment property (431) (467) (215) (220)
Capital expenditures for intangible assets (inclusive of advance payments) (72) (47) (23) (19)
Proceeds from disposals of investments accounted for using the equity method and non-current financial assets 1 1 1 0
Proceeds from disposals of previously consolidated companies net of cash acquired 263 929 (27) 10
Proceeds from disposals of property, plant and equipment and investment property 28 52 14 39
Proceeds from disposals of intangible assets 7 1 0 0
Cash flows from investing activities - continuing operations (261) 462 (258) (196)
Cash flows from investing activities - discontinued operations (495) (198) (259) (41)
Cash flows from investing activities - total (756) 264 (517) (237)
Proceeds from issuance of bonds 1,250 1,600 1,250 1,600
Repayment of bonds 0 (1,000) 0 (1,000)
Proceeds from liabilities to financial institutions 1,738 1,880 853 195
Repayments of liabilities to financial institutions (1,050) (530) (805) (151)
Proceeds from/(repayments on) notes payable and other loans 4 162 (147) (113)
Increase/(decrease) in bills of exchange 1 (4) (2) 0
Decrease in current securities 0 1 0 0
Payment of ThyssenKrupp AG dividend (232) 0 (232) 0
Profit attributable to non-controlling interest (48) (28) (28) (15)
Expenditures for acquisitions of shares of already consolidated companies (15) (7) 0 (7)
Financing of discontinued operations (1,031) (431) (293) (81)
Other financing activities (169) 88 99 14
Cash flows from financing activities - continuing operations 448 1,731 695 442
Cash flows from financing activities - discontinued operations 938 353 292 43
Cash flows from financing activities - total 1,386 2,084 987 485
Net increase/(decrease) in cash and cash equivalents - total (1,089) 2,370 566 410
Effect of exchange rate changes on cash and cash equivalents - total 46 16 (15) 53
Cash and cash equivalents at beginning of reporting period - total 3,568 2,347 1,974 4,270
Cash and cash equivalents at end of reporting period - total 2,525 4,733 2,525 4,733
[thereof cash and cash equivalents within disposal groups] [-] [-] [-] [-]
[thereof cash and cash equivalents within discontinued operations] [28] [47] [28] [47]
Additional information regarding cash flows of continuing operations from interest, dividends and income taxes which are included in operating cash flows:
Interest received 78 55 40 26
Interest paid (256) (305) (215) (266)
Dividends received 4 3 2 1
Income taxes paid (134) (157) (86) (55)
See Note 13 of accompanying selected notes. * Prior year figures have been adjusted (see in particular Note 2).
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 34
ThyssenKrupp AG
Selected notes
Corporate information ThyssenKrupp Aktiengesellschaft (“ThyssenKrupp AG” or “Company”) is a
publicly traded corporation domiciled in Duisburg and Essen in Germany.
The condensed interim consolidated financial statements of ThyssenKrupp
AG and subsidiaries, collectively the “Group”, for the period from October
01, 2012 to March 31, 2013, were authorized for issue in accordance with
a resolution of the Executive Board on May 10, 2013.
Basis of presentation The accompanying Group’s condensed interim consolidated financial
statements have been prepared in accordance with section 37w of the
German Securities Trading Act (WpHG) and International Financial
Reporting Standards (IFRS) and its interpretations adopted by the
International Accounting Standards Board (IASB) for interim financial
information effective within the European Union. Accordingly, these
financial statements do not include all of the information and footnotes
required by IFRS for complete financial statements for year-end reporting
purposes.
The accompanying Group’s condensed interim consolidated financial
statements have been reviewed. In the opinion of Management, the
interim financial statements include all adjustments of a normal and
recurring nature considered necessary for a fair presentation of results for
interim periods. Results of the period ended March 31, 2013, are not
necessarily indicative for future results.
The preparation of condensed interim financial statements in conformity
with IAS 34 Interim Financial Reporting requires Management to make
judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates.
The accounting principles and practices as applied in the condensed
interim consolidated financial statements correspond to those pertaining
to the most recent annual consolidated financial statements. A detailed
description of the accounting policies is published in the notes to the
consolidated financial statements of our annual report 2011/2012.
Recently adopted accounting standards In fiscal year 2012/2013, ThyssenKrupp adopted the following
amendments:
In June 2011 the IASB issued amendments to IAS 1 “Presentation of
Financial Statements” under the title “Presentation of Items of Other
Comprehensive Income”. The amendments require a classification of
items presented in other comprehensive income into items that might
subsequently be reclassified to the income statement and items that will
not. The amendments to IAS 1 are compulsory for fiscal years beginning
on or after July 01, 2012. The adoption of the amendments did not have a
material impact on the Group’s consolidated financial statements.
Recently issued accounting standards In fiscal year 2012/2013, the following amendments to already existing
standards have been issued which must still be endorsed by the EU before
they can be adopted:
In October 2012 the IASB issued “Investment Entities” as amendments to
IFRS 10, IFRS 12 and IAS 27 regarding the accounting of investment
entities. The amendments define investment entities and provide an
exception to the general consolidation requirements of subsidiaries in
IFRS 10; instead of consolidating those subsidiaries are measured at fair
value through profit or loss. In addition the amendments set out disclosure
requirements for investment entities. The amendments are effective for
fiscal years beginning on or after January 01, 2014, while earlier
application is permitted. Currently, Management does not expect the
amendments – if endorsed by the EU in the current version – to have any
relevance for the Group’s consolidated financial statements.
01 Acquisitions and disposals After the disposal of the Stainless Global business area had been initiated
as part of the program for the further strategic development as of
September 30, 2011, the transaction was completed with the combination
with the Finnish company Outokumpu on December 28, 2012. This
disposal as well as other smaller disposals that are, on an individual basis,
immaterial affected in total, based on the values as of the respective
disposal date, the Group’s consolidated financial statements as presented
below:
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 35
MILLION €
1st half ended
March 31, 2013
Goodwill 2
Other intangible assets 27
Property, plant and equipment 1,813
Investment property 12
Investments accounted for using the equity method 19
Other financial assets 2
Other non-financial assets 25
Deferred tax assets 87
Inventories 1,801
Trade accounts receivable 555
Other current financial assets 59
Other current non-financial assets 89
Current income tax assets 17
Cash and cash equivalents 85
Total assets disposed of 4,593
Accrued pension and similar obligations 351
Provisions for other non-current employee benefits 25
Other non-current provisions 106
Deferred tax liabilities 87
Non-current financial debt 39
Other non-current non-financial liabilities 1
Provisions for current employee benefits 3
Other current provisions 63
Current income tax liablilities 3
Current financial debt 137
Trade accounts payable 1,221
Other current financial liabilities 2,345
Other current non-financial liabilities 128
Total liabilities disposed of 4,509
Net assets disposed of 84
Cumulative other comprehensive income 9
Non-controlling interest (11)
Gain/(loss) resulting from the disposals 151
Selling prices 233
thereof: received in cash and cash equivalents 9
In addition in the 1st half year ended March 31, 2013, the Group acquired
smaller companies that are, on an individual basis, immaterial. Based on
the values as of the acquisition date, these acquisitions affected in total
the Group’s consolidated financial statements as presented below:
MILLION €
1st half ended
March 31, 2013
Goodwill 17
Other intangible assets 15
Investments accounted for using the equity method (5)
Inventories 2
Trade accounts receivable 6
Other current non-financial assets 3
Cash and cash equivalents 2
Total assets acquired 40
Accrued pension and similar obligations 1
Deferred tax liabilities 1
Other current provisions 4
Trade accounts payable 2
Other current financial liabilities 2
Other current non-financial liabilities 4
Total liabilities assumed 14
Net assets acquired 26
Non-controlling interest 0
Purchase prices 26
thereof: paid in cash and cash equivalents 22
02 Discontinued operations and disposal groups
As part of the portfolio optimization and of the decision about the concept
for the further strategic development in May 2011, in fiscal year
2010/2011 as well as in fiscal year 2011/2012 the disposal of the Berco
group of the Components Technology business area and the disposal of
the Tailored Blanks group of the Steel Europe business area have been
initiated. Both disposals did not meet the requirements of IFRS 5 for a
presentation as a discontinued operation and were not completed as of
the balance sheet date. Therefore, revenues and expenses were continued
to be presented as income from continuing operations until the date of the
disposal.
The disposal of the entire Steel Americas business area initiated in
September 2012, met the criteria for a presentation as a discontinued
operation for the first time as of September 30, 2012, for the Stainless
Global business area the criteria have already been met since September
30, 2011 and ended December 28, 2012 with the combination with the
Finnish company Outokumpu. Therefore, for the reporting period all
revenues and expenses of the Steel Americas business area until March
31, 2013 and all revenues and expenses of the Stainless Global business
area until December 28, 2012 as well as income and expense incurred
after the disposal but directly related to the disposal of Stainless Global
will be presented in the consolidated statement of income in the line item
“discontinued operations (net of tax)”. The prior year presentation in which
the Stainless Global business area has already been presented as a
discontinued operation has been adjusted accordingly for the Steel
Americas business area.
For entities for which the disposal has not been completed as of the
balance sheet date of the respective reporting period, the assets and
liabilities of the disposal group and of the discontinued operation have
been disclosed separately in the consolidated balance sheet of the
reporting period in the line items “assets held for sale” and “liabilities
associated with assets held for sale”.
In September 2012 the disposal of the Berco group has been initiated in
the Components Technology business area. Berco is a leading global
supplier of undercarriages, based mainly on forged components, for the
construction machinery sector and offers a broad range of parts and
services for both OEMs and the aftermarket. Its products are used in
machinery from large mining equipment to mini excavators. In the context
of the initiated disposal an impairment loss of €4 million on intangible
assets and of €131 million on property, plant and equipment was
recognized in cost of sales in the 4th quarter of 2011/2012 resulting from
the write-down of the assets to fair value less costs to sell. At the same
time a deferred tax asset of €1 million was recognized. The assets and
liabilities of the disposal group as of March 31, 2013 are presented in the
following table:
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 36
MILLION € / DISPOSAL GROUP BERCO GROUP
March 31, 2013
Other intangible assets 3
Property, plant and equipment 32
Deferred tax assets 13
Inventories 209
Trade accounts receivable 55
Other current non-financial assets 21
Current income tax assets 2
Assets held for sale 335
Accrued pension and similar obligations 31
Other non-current provisions 1
Other current provisions 7
Current income tax liabilities 1
Trade accounts payable 93
Other current financial liabilities 3
Other current non-financial liabilities 27
Liabilities associated with assets held for sale 165
In addition in September 2012 the disposal of the ThyssenKrupp Tailored
Blanks group has been initiated in the Steel Europe business area.
Tailored Blanks is supplier of body systems to the auto industry which
produces tailored steel blanks. The sale is subject to approval by the
supervisory bodies and the responsible regulatory authorities. The assets
and liabilities of the disposal group as of March 31, 2013 are presented in
the following table:
MILLION € / DISPOSAL GROUP TAILORED BLANKS GROUP
March 31, 2013
Goodwill 6
Other intangible assets 4
Property, plant and equipment 104
Investments accounted for using the equity method 2
Deferred tax assets 3
Inventories 59
Trade accounts receivable 124
Other current financial assets 3
Other current non-financial assets 11
Current income tax assets 5
Assets held for sale 321
Accrued pension and similar obligations 9
Provisions for other non-current employee benefits 1
Deferred tax liabilities 5
Provisions for current employee benefits 1
Other current provisions 1
Current income tax liabilities 3
Trade accounts payable 68
Other current financial liabilities 1
Other current non-financial liabilities 10
Liabilities associated with assets held for sale 99
Discontinued operations: Steel Americas and Stainless Global business areas In September 2012, the Supervisory Board noted with assent the
Executive Board’s intention to open a bidding process for the Steel
Americas business area. We remain on signing a deal promptly.
The €3,645 million impairment which became necessary as of September
30, 2012 due to the intention to sell. The impairment was based on the
expected fair value less costs to sell. Non-binding offers had been
received for each plant separately and both together. The valuation also
included internal calculations, made in part with support from auditors and
management consultants, which took into account all knowledge available
to ThyssenKrupp from the ongoing sale process and overall represented a
best possible estimate.
Taking into account the current negotiations, as of March 31, 2013 there
is a new assessment of the fair value less costs to sell. This resulted in a
further impairment loss of €683 million which was allocated to property,
plant and equipment and in this context caused an adjustment of deferred
tax assets of €86 million. The expense is recognized in income/(loss) of
discontinued operations of the 1st half year ended March 31, 2013 and
the 2nd quarter ended March 31, 2013, respectively.
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 37
The results of the Steel Americas business area that classifies as a discontinued operation are as follows:
MILLION € / DISCONTINUED OPERATION STEEL AMERICAS
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Net sales 770 834 443 461
Other income 134 42 108 10
Expenses (1,428) (985) (790) (490)
Ordinary income/(loss) from discontinued operations (before taxes) (524) (109) (239) (19)
Income tax (expense)/income 132 39 73 11
Ordinary income/(loss) from discontinued operations (net of tax) (392) (70) (166) (8)
Gain/(loss) recognized on measurement adjustments of discontinued operations (before taxes) — (683) — (683)
Income tax (expense)/income — (86) — (86)
Gain/(loss) recognized on measurement adjustments of discontinued operations (net of tax) 0 (769) 0 (769)
Discontinued operations (net of tax) (392) (839) (166) (777)
thereof:
ThyssenKrupp AG's stockholders (334) (623) (140) (569)
Non-controlling interest (58) (216) (26) (208)
The assets and liabilities of the discontinued operation Steel Americas
business area as of March 31, 2013 are presented in the following table:
MILLION € / DISCONTINUED OPERATION STEEL AMERICAS
March 31, 2013
Other intangible assets 26
Property, plant and equipment 2,415
Other non-financial assets 202
Inventories 732
Trade accounts receivable 240
Other current financial assets 12
Other current non-financial assets 228
Current income tax assets 7
Cash and cash equivalents 47
Assets held for sale 3,909
Non-current financial debt 634
Other current provisions 20
Current income tax liabilities 4
Current financial debt 95
Trade accounts payable 363
Other current financial liabilities 75
Other current non-financial liabilities 78
Liabilities associated with assets held for sale 1,269
On initial classification as a discontinued operation, non-current assets
are no longer amortized and depreciated, therefore in the 1st half year
ended March 31, 2013, amortization and depreciation of €221 million
were suspended; thereof €110 million refer to the 2nd quarter ended
March 31, 2013. Included in these amounts are capitalized borrowing
costs of €16 million in the 1st half year ended March 31, 2013 and of €8
million the 2nd quarter ended March 31, 2013, respectively.
As of September 2011 as part of its program for the further strategic
development, the corporate, organizational and contractual conditions for
creating a separate Stainless Global and consequently the conditions for
the first-time presentation as a discontinued operation were established.
In the context with the initiated disposal, as of September 30, 2011 the
measurement of discontinued operations at fair value less costs to sell
based on internal calculations and market observations resulted in an
impairment loss of €510 million. Thereof, €45 million applied to goodwill
and the remaining impairment loss was allocated to property, plant and
equipment. The expense is recognized in income/(loss) of discontinued
operations of the 4th quarter of 2010/2011.
On January 31, 2012, the agreement to combine the Finnish stainless
steel producer Outokumpu and ThyssenKrupp’s stainless steel operations
was signed. The EU Commission approved the combination in November
2012 with certain conditions. Based on the contract with Outokumpu
about the intented sale, in 2011/2012 the measurement resulted in an
additional impairment loss of €400 million that was allocated to property,
plant and equipment. The expense of €400 million in total is recognized in
income/(loss) of discontinued operations of the year ended September 30,
2012. In the 1st half year ended March 31, 2012 an impairment loss of
€515 million has been recognized; thereof €250 million refer to the 2nd
quarter of 2011/2012.
Furthermore, due to the shut-down of the Krefeld melt shop by the end of
2013, an impairment loss of €42 million on property, plant and equipment
was recognized in income/(loss) of discontinued operations of the 2nd
quarter of 2011/2012. In May 2012, Inoxum agreed with the relevant
works council on a social plan in connection with the consolidation
measures regarding the relocation of the Düsseldorf-Benrath facility and
the connected personnel reduction. The social plan includes early
retirement models and compensations for employees leaving Inoxum.
Further, it includes compensations for employees being relocated. The
social plan will apply accordingly to the planned closure of the Krefeld
melt shop in the event the Inoxum transaction is completed. As of
September 30, 2012 the overall costs in connection with that social plan
have been recognized as a restructuring provision of €58 million in the
aggregate for Düsseldorf-Benrath and Krefeld.
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 38
On December 28, 2012 the combination of the Stainless Global business
area with the Finnish company Outokumpu was completed. With the
closing of this transaction ThyssenKrupp received €1 billion in cash from
Outokumpu for the contribution of Inoxum. In addition Outokumpu took on
the external net financial debt and pension obligations. ThyssenKrupp
holds a share of 29.9% in Outokumpu and a financial receivable
outstanding against Outokumpu with a current value of around €1.2 billion
and an original maximum term of 9 years. Under the purchase agreement,
this financial receivable can be adjusted by a maximum of €200 million in
the event of negative financial consequences arising for Outokumpu from
conditions imposed under merger control law.
The results of the Stainless Global business area that classified as a
discontinued operation until December 28, 2012 are presented in the
following table. In addition the table includes income and expense
incurred after the disposal but directly related to the disposal of Stainless
Global; these items are shown separately in the column for the 2nd
quarter ended March 31, 2013 and are also included in the cumulative
column for the 1st half year ended March 31, 2013. They mainly comprise
transaction-related interest income and transaction costs.
MILLION € / DISCONTINUED OPERATION STAINLESS GLOBAL
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Net sales 2,904 1,268 1,597 0
Other income 14 12 9 3
Expenses (3,045) (1,360) (1,667) (1)
Ordinary income/(loss) from discontinued operations (before taxes) (127) (80) (61) 2 Income tax (expense)/income 51 (5) 28 0
Ordinary income/(loss) from discontinued operations (net of tax) (76) (85) (33) 2
Gain/(loss) recognized on measurement adjustments/ disposal of discontinued operations (before taxes) (515) 146 (250) 0 Income tax (expense)/income — — — —
Gain/(loss) recognized on measurement adjustments/ disposal of discontinued operations (net of tax) (515) 146 (250) 0 Discontinued operations (net of tax) (591) 61 (283) 2
thereof: ThyssenKrupp AG's stockholders (589) 62 (282) 2
Non-controlling interest (2) (1) (1) 0
On initial classification as a discontinued operation, non-current assets
are no longer amortized and depreciated, therefore until the disposal as of
December 28, 2012, amortization and depreciation of €52 million were
suspended; in the 1st half year ended March 31, 2012, amortization and
depreciation of €94 million were suspended; thereof €48 million refer to
the 2nd quarter ended March 31, 2012.
The assets and liabilities that are assigned to the discontinued operation
Stainless Global as of December 28, 2012 are presented in the following
table:
MILLION € / DISCONTINUED OPERATION STAINLESS GLOBAL
Dec. 28, 2012
Other intangible assets 27
Property, plant and equipment 1,812
Investment property 12
Investments accounted for using the equity method 19
Other financial assets 2
Other non-financial assets 25
Deferred tax assets 87
Inventories 1,798
Trade accounts receivable 549
Other current financial assets 57
Other current non-financial assets 88
Current income tax assets 16
Cash and cash equivalents 84
Assets disposed of 4,576
Accrued pension and similar obligations 351
Provisions for other non-current employee benefits 25
Other non-current provisions 106
Deferred tax liabilities 87
Non-current financial debt 39
Other non-current non-financial liabilities 1
Provisions for current employee benefits 3
Other current provisions 62
Current income tax liabilities 3
Current financial debt 136
Trade accounts payable 1,220
Other current financial liabilities 2,345
Other current non-financial liabilities 122
Liabilities disposed of 4,500
The 29.9% shareholding in Outokumpu obtained after the disposal of the
Stainless Global business area is accounted for in the consolidated
financial statements according to the equity method. As of December 31,
2012 this shareholding is initially reported with a value of €491 million,
based on the share price at the time of the transaction (€0.79) multiplied
by the number of Outokumpu shares received. As of March 31, 2013, the
adjustment of the carrying amount of the investment resulted in a
reduction of €34 million to €457 million.
The fair value of the shares acquired at the time of the transaction is
currently being determined in connection with the respective purchase
price allocation. Any difference will impact the carrying amount of the
investment.
03 Share-based compensation Management incentive plans In the 2nd quarter ended March 31, 2013, the members of the Executive
Board of ThyssenKrupp AG were granted stock rights of the 3rd
installment of the long-term incentive plan (LTI). At the same time, in the
2nd quarter ended March 31, 2013, the stock rights granted in the 8th and
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 39
final installment of the mid-term incentive plan (MTI) expired without any
payment due to the decline of the average ThyssenKrupp EVA over the
three-year performance period compared to the average EVA over the
previous three fiscal year period. In the 1st half year ended March 31,
2013, the Group recorded expenses of €2.2 million from the obligations of
the long-term incentive plan LTI (1st half year ended March 31, 2012:
expense of €1.4 million); thereof expenses of €0 million (1st half year
ended March 31, 2012: income of €0.4 million) is presented in
income/(loss) of discontinued operations. In the 2nd quarter ended March
31, 2013, the LTI resulted in an expense of €5.9 million (2nd quarter
ended March 31, 2012: €11.2 million); thereof an expense of €0 million
(2nd quarter ended March 31, 2012: €0 million) is presented in
income/(loss) of discontinued operations.
In September 2010 the structure of the variable compensation for
members of the Executive Board of ThyssenKrupp AG was modified. 25%
of the performance bonus granted for the respective fiscal year and 55%
of the additional bonus granted depending on the economic situation will
be obligatorily converted into ThyssenKrupp AG stock rights to be paid out
after a three-year lock-up period based on the average ThyssenKrupp
share price in the 4th quarter of the 3rd fiscal year. In the 3rd quarter of
2010/2011 the structure of the variable compensation for additional
executive employees was modified. 20% of the performance bonus
granted for the respective fiscal year will be obligatorily converted into
ThyssenKrupp AG stock rights to be paid out after a three-year lock-up
period based on the average ThyssenKrupp share price in the 4th quarter
of the 3rd fiscal year. This compensation item resulted in expenses of €0.1
million in the 1st half year ended March 31, 2013 (1st half year ended
March 31, 2012: €4.4 million) and in income of €0.3 million in the 2nd
quarter ended March 31, 2013 (2nd quarter ended March 31, 2012:
expense of €4.3 million).
04 Accrued pension and similar obligations Based on updated interest rates and fair value of plan assets, an updated
valuation of accrued pension and health care obligations was performed
as of March 31, 2013, taking into account these effects while other
assumptions remained unchanged.
MILLION €
Sept. 30, 2012 March 31, 2013
Accrued pension liability 6,922 6,690
Accrued postretirement obligations other than pensions 850 827
Other accrued pension-related obligations 314 270 Reclassification due to the presentation as liabilities associated with assets held for sale (378) (40)
Total 7,708 7,747
The Group applied the following weighted average assumptions to
determine pension and postretirement benefit obligations other than
pensions:
IN %
Sept. 30, 2012 March 31, 2013
Germany
Outside Germany Germany
Outside Germany
Discount rate for accrued pension liability 3.60 3.44 3.30 3.53
Discount rate for postretirement obligations other than pensions (only USA) — 3.50 — 3.75
The net periodic postretirement benefit cost for health care obligations is as follows:
MILLION €
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Germany
Outside Germany Germany
Outside Germany Germany
Outside Germany Germany
Outside Germany
Service cost 38 17 53 18 19 9 26 9
Interest cost 134 45 114 39 67 22 57 19
Expected return on plan assets (6) (50) (6) (52) (3) (25) (3) (25)
Past service cost 0 0 12 0 0 0 12 0
Curtailment and settlement gains 0 0 0 (11) 0 0 0 0
Net periodic pension cost 166 12 173 (6) 83 6 92 3
The above presented net periodic pension cost for defined benefit plans in Germany include cost of €5 million in the 1st half year ended March 31, 2013
(1st half year ended March 31, 2012: €7 million) and of €0 million in the 2nd quarter ended March 31, 2013 (2nd quarter ended March 31, 2012: €4
million) attributable to discontinued operations. The above presented net periodic pension cost for defined benefit plans outside Germany does not
include any cost in the 1st half year ended March 31, 2013 and in the 2nd quarter ended March 31, 2013 attributable to discontinued operations (1st
half year ended March 31, 2012: €1 million and 2nd quarter ended March 31, 2012: €1 million). These costs are presented in income/(loss) from
discontinued operations in the consolidated statement of income.
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 40
The net periodic postretirement cost for health care obligations is as follows:
MILLION €
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
USA USA USA USA
Service cost 2 0 1 (1)
Interest cost 22 15 11 8
Expected return on reimbursement rights (2) 0 (1) 0
Past service cost (33) 0 (3) 0
Net periodic postretirement benefit cost/(income) (11) 15 8 7
05 Issuance of a bond In February 2013 ThyssenKrupp issued a 1.25 billion Euro bond
documented under the existing 10 billion Euro Debt Issuance Programme.
The bond has a 5 1/2 year maturity and carries a coupon of 4.0% p.a. at
an issuance price of 99.681%. Due to the very strong performance of the
secondary market the bond was raised by €350 million in March 2013
with an unchanged coupon at an issuance price of 100.625%. With this
transaction ThyssenKrupp AG made use of the good market environment,
extended its maturity profile and strengthened the debt capital market
share in its financing mix.
06 Contingencies including pending lawsuits and claims for damages
Guarantees ThyssenKrupp AG as well as, in individual cases, its subsidiaries have
issued or have had guarantees in favour of business partners or lenders.
The following table shows obligations under guarantees where the
principal debtor is not a consolidated Group company:
MILLION €
Maximum potential
amount of future payments
as of March 31, 2013
Provision as of March 31, 2013
Advance payment bonds 267 1
Performance bonds 121 1
Third party credit guarantee 174 0
Residual value guarantees 61 2
Other guarantees 110 1
Total 733 5
The terms of those guarantees depend on the type of guarantee and may
range from three months to ten years (e.g. rental payment guarantees).
The basis for possible payments under the guarantees is always the non-
performance of the principal debtor under a contractual agreement, e.g.
late delivery, delivery of non-conforming goods under a contract or non-
performance with respect to the warranted quality or default under a loan
agreement.
All guarantees are issued by or issued by instruction of ThyssenKrupp AG
or subsidiaries upon request of the principal debtor obligated by the
underlying contractual relationship and are subject to recourse provisions
in case of default. If such a principal debtor is a company owned fully or
partially by a foreign third party, the third party is generally requested to
provide additional collateral in a corresponding amount.
Commitments and other contingencies Due to the high volatility of iron ore prices, in the Steel Europe and Steel
Americas business areas the existing long-term iron ore and iron ore
pellets supply contracts are measured for the entire contract period at the
iron ore prices applying as of the respective balance sheet date.
Compared to September 30, 2012, the purchasing commitments
increased by €3.7 billion to €19.3 billion due to the higher ore prices.
Pending lawsuits and claims for damages The Group is involved in pending and threatened litigation in connection
with the purchase and sale of certain companies, which may lead to
partial repayment of the purchase price or to the payment of damages. In
addition, damage claims may be payable to contractual partners,
customers, consortium partners and subcontractors under performance
contracts. Some of these claims have proven unfounded, have been
ended by settlement or expired under the statute of limitations. A number
of these proceedings are still pending.
In connection with the rail cartel we and other participants have now been
served with a statement of claim from Deutsche Bahn AG (DB). The claim
is directed against ThyssenKrupp GfT Gleistechnik, ThyssenKrupp
Materials International and further cartel participants. DB is seeking
extensive information and in this connection estimates the total damages
caused by all participants in the cartel at €550 million plus interest of
approx. €300 million.
Zwischenabschluss 1. Halbjahr 2012/2013 Verkürzter Konzern-Anhang 41
In addition to DB further customers have announced their intention to file
claims for compensation. A reliable estimate of the financial
consequences of such claims is not yet possible for ThyssenKrupp.
For recognizable risks from claims for compensation and anticipated fines
in connection with the ongoing investigations of the Federal Cartel Office,
additional provisions in the amount of €207 million were recognized as of
March 31, 2013.
Following an anonymous tip, the Federal Cartel Office is investigating
ThyssenKrupp Steel Europe AG and others on an initial suspicion of price
agreements dating back to 1998 relating to the supply of specific steel
products to German automotive manufacturers and their suppliers.
ThyssenKrupp has initiated its own internal inquiry into the allegations
with the support of external legal advisers which is also taking account of
findings from the amnesty program. The internal inquiry and the
investigations of the Federal Cartel Office are ongoing. At present
significant risks for the Group's net assets, financial position and results of
operations cannot be ruled out.
There have been no significant changes since September 30, 2012 to
other contingencies, including pending litigations.
07 Derivative financial instruments The notional amounts and fair values of the Group’s derivative financial instruments are as follows:
MILLION €
Notional amount
Sept. 30, 2012 Fair value
Sept. 30, 2012 Notional amount March 31, 2013
Fair value March 31, 2013
Derivative financial instruments
Assets
Foreign currency derivatives including embedded derivatives 1,695 35 2,381 80
Interest rate derivatives* 172 5 175 2
Commodity derivatives 221 20 287 12
Total 2,088 60 2,843 94
Liabilities
Foreign currency derivatives including embedded derivatives 5,086 57 1,800 39
Interest rate derivatives* 1,122 70 1,355 74
Commodity derivatives 451 40 303 43
Total 6,659 167 3,458 156
* inclusive of cross currency swaps
08 Related parties As of March 31, 2013 ThyssenKrupp holds a financial receivable
outstanding against Outokumpu with a current value of around €1.2 billion
and an original maximum term of 9 years.
09 Segment reporting At January 01, 2013 the former Plant Technology and Marine Systems
business areas were combined into the new Industrial Solutions business
area. Industrial Solutions is a leading international supplier in special and
large-scale plant construction as well as naval shipbuilding. The figures
for the prior-year periods have been adjusted accordingly.
As a measure of the earning power of the individual segments, the EBIT
key indicator by definition contains only financial income components of
an operating nature. The 29.9% interest in Outokumpu now held by
ThyssenKrupp following the sale of Stainless Global, which is accounted
for using the equity method, is reported under Corporate as a financial
interest due to its non-operating nature and the equity income/(expense)
is not included in EBIT.
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 42
Segment information for the 1st half year ended March 31, 2012 and March 31, 2013 as well as for the 2nd quarter ended March 31, 2012 and March
31, 2013 is as follows:
MILLION €
Components Technology
Elevator Technology
Industrial Solutions
Materials Services
Steel Europe Corporate
Steel Americas*
Stainless Global* Consolidation Group
1st half ended March 31, 2012
External sales 3,629 2,670 2,503 6,324 4,461 32 770 2,904 0 23,293
Internal sales within the Group 4 0 8 229 955 40 274 302 (1,812) 0
Total sales 3,633 2,670 2,511 6,553 5,416 72 1,044 3,206 (1,812) 23,293
EBIT 297 231 184 114 123 (218) (518) (624) (174) (585)
Adjusted EBIT 231 274 357 130 132 (221) (516) (36) (174) 177
1st half ended March 31, 2013
External sales 2,699 2,919 2,724 5,572 3,895 41 834 1,268 0 19,952
Internal sales within the Group 6 1 10 166 870 57 155 134 (1,399) 0
Total sales 2,705 2,920 2,734 5,738 4,765 98 989 1,402 (1,399) 19,952
EBIT 108 304 339 (121) 19 (251) (782) 70 (182) (496)
Adjusted EBIT 105 315 320 98 39 (217) (99) (70) (190) 301
2nd quarter ended March 31, 2012
External sales 1,875 1,319 1,197 3,316 2,382 26 443 1,597 0 12,155
Internal sales within the Group 5 3 5 92 504 11 103 171 (894) 0
Total sales 1,880 1,322 1,202 3,408 2,886 37 546 1,768 (894) 12,155
EBIT 128 118 175 74 21 (119) (230) (303) (92) (228)
Adjusted EBIT 128 132 193 90 30 (120) (228) 20 (93) 152
2nd quarter ended March 31, 2013
External sales 1,356 1,387 1,423 2,841 2,058 14 461 0 0 9,540
Internal sales within the Group 4 1 5 82 454 29 40 0 (615) 0
Total sales 1,360 1,388 1,428 2,923 2,512 43 501 0 (615) 9,540
EBIT 65 133 198 (157) (10) (139) (695) (2) (93) (700)
Adjusted EBIT 63 146 180 58 9 (120) (12) (1) (96) 227
* Discontinued operation
Net sales and adjusted EBIT as well as operating EBIT reconcile to EBT from continuing operations as presented in the consolidated statement of
income as following:
MILLION €
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Sales as presented in segment reporting 23,293 19,952 12,155 9,540
- Sales of Steel Americas (1,044) (989) (546) (501)
- Sales of Stainless Global (3,206) (1,402) (1,768) 0
+ Sales of discontinued operations to Group companies 576 289 274 40
+ Sales of Group companies to discontinued operations 172 89 80 23
Sales as presented in the statement of income 19,791 17,939 10,195 9,102
MILLION €
1st half ended
March 31, 2012
1st half ended
March 31, 2013
2nd quarter ended
March 31, 2012
2nd quarter ended
March 31, 2013
Adjusted EBIT as presented in segment reporting 177 301 152 227
Special items (762) (797) (380) (927)
EBIT as presented in segment reporting (585) (496) (228) (700)
- Depreciation of capitalized borrowing costs eliminated in EBIT (21) (7) (10) (4)
+ Non-operating income/(expense) from companies accounted for using the equity method 0 (38) 0 (38)
+ Finance income 385 244 71 114
- Finance expense (667) (557) (208) (273)
- Items of finance income assigned to EBIT based on economic classification (64) (6) (63) 20
+ Items of finance expense assigned to EBIT based on economic classification 37 24 37 5
EBT - Group (915) (836) (401) (876)
- EBT of Steel Americas 524 792 239 702
- EBT of Stainless Global 642 (66) 311 (2)
EBT from continuing operations as presented in the statement of income 251 (110) 149 (176)
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 43
10 Cost of sales Cost of sales for the 1st half year ended March 31, 2013, includes write-
downs of inventories of €21 million which mainly relate to the Steel
Europe, Components Technology and Materials Services business areas.
As of September 30, 2012, write-downs amounted to €49 million. In the
1st half year ended March 31, 2012, cost of sales includes write-downs of
inventories of €35 million which mainly related to the Steel Europe and
Materials Services business areas. In addition, income/(loss) from
discontinued operations includes write-downs of inventories of €41 million
in the 1st half year ended March 31, 2013 (1st half year ended March 31,
2012: €31 million).
11 Income/(expense) from companies accounted for using the equity method
The line item includes pro rata losses of Outokumpu of €38 million.
12 Earnings per share Basic earnings per share is calculated as follows:
1st half ended March 31, 2012 1st half ended March 31, 2013 2nd quarter ended March 31, 2012 2nd quarter ended March 31, 2013
Total amount
in million € Earnings per
share in € Total amount
in million € Earnings per
share in € Total amount
in million € Earnings per
share in € Total amount
in million € Earnings per
share in €
Loss from continuing operations (net of tax) (attributable to ThyssenKrupp AG's stockholders) (123) (0.24) (60) (0.12) (164) (0.32) (89) (0.18)
Loss from discontinued operations (net of tax) (attributable to ThyssenKrupp AG's stockholders) (924) (1.79) (561) (1.09) (423) (0.82) (567) (1.10) Net loss (attributable to ThyssenKrupp AG's stockholders) (1,047) (2.03) (621) (1.21) (587) (1.14) (656) (1.28)
Weighted average shares 514,489,044 514,489,044 514,489,044 514,489,044
Relevant number of common shares for the determination of earnings per share Earnings per share have been calculated by dividing net loss attributable
to common stockholders of ThyssenKrupp AG (numerator) by the
weighted average number of common shares outstanding (denominator)
during the period. Shares sold during the period and shares reacquired
during the period have been weighted for the portion of the period that
they were outstanding.
There were no dilutive securities in the periods presented.
13 Additional information to the consolidated statement of cash flows
The liquid funds considered in the consolidated statement of cash flows
correspond to the „Cash and cash equivalents“ line item in the
consolidated statement of financial position taking into account the cash
and cash equivalents attributable to the disposal groups inclusive of
discontinued operations.
Non-cash investing activities In the 1st half year ended March 31, 2013, the acquisition and first-time
consolidation of companies created an increase in non-current assets of
€10 million (1st half year ended March 31, 2012: €65 million). In the 2nd
quarter ended March 31, 2013 these increases amounted to €6 million
(2nd quarter ended March 31, 2012: €3 million).
The non-cash addition of assets under finance leases in the 1st half year
ended March 31, 2013 amounted to €5 million (1st half year ended March
31, 2012: €3 million) and in the 2nd quarter ended March 31, 2013 to €2
million (2nd quarter ended March 31, 2012: €1 million).
In connection with the second construction stage of the “ThyssenKrupp
Quarter” located in Essen, there was a non-cash addition of property,
plant and equipment of €10 million in the 1st half year ended March 31,
2013 (1st half year ended March 31, 2012: 0) and of €5 million in the 2nd
quarter ended March 31, 2013 (2nd quarter ended March 31, 2012: 0).
Non-cash financing activities In the 1st half year ended March 31, 2013, the acquisition and first-time
consolidation of companies did not result in any increase in gross financial
debt (1st half year ended March 31, 2012: €2 million); in the 2nd quarter
ended March 31, 2013 as well as in the 2nd quarter ended March 31,
2012 there wasn’t also any increase.
In connection with the second construction stage of the “ThyssenKrupp
Quarter” located in Essen, there was a non-cash increase of financial debt
of €10 million in the 1st half year ended March 31, 2013 (1st half year
ended March 31, 2012: 0) and of €5 million in the 2nd quarter ended
March 31, 2013 (2nd quarter ended March 31, 2012: 0).
Condensed Interim Financial Statements 1st half 2012/2013 Selected notes 44
14 Subsequent events On April 17, 2013 the Supervisory Board of ThyssenKrupp Electrical Steel
GmbH approved plans to find a best-owner solution for the electrical steel
operations in Gelsenkirchen, Isbergues in France and Nashik in India and
to carry out corresponding preparatory operational and administrative
measures. The disposal concerns sales of approx. €450 million, non-
current assets of approx. €180 million, and around 1,800 employees. At
the same time approval was given for a reorganization of the electrical
steel activities involving the transfer of the Bochum plant for non-oriented
electrical steel to Steel Europe AG, where it is to be continued.
On May 06, 2013 by resolution of the Materials Services Executive Board
the disposal process for the rail and construction equipment activities was
initiated. This area has sales of approx. €400 million and around 800
employees.
Essen, May 10, 2013
ThyssenKrupp AG
The Executive Board
Hiesinger
Burkhard Kerkhoff
1st half 2012/2013 Review report of the half-year financial report 45
Review report of the half-year financial report
To ThyssenKrupp AG, Duisburg and Essen
We have reviewed the condensed consolidated interim financial
statements - comprising statement of financial position, the statement of
income and statement of comprehensive income, the statement of
changes in equity, the statement of cash flows and selected explanatory
notes – and the interim group management report of ThyssenKrupp AG,
Duisburg and Essen, for the period from October 1, 2012, to March 31,
2013, which are part of the quarterly financial report pursuant to § (Article)
37w WpHG ("Wertpapierhandelsgesetz" German Securities Trading Act).
The preparation of the condensed consolidated interim financial
statements in accordance with the IFRS applicable to interim financial
reporting as adopted by the EU and of the interim group management
report in accordance with the provisions of the German Securities Trading
Act applicable to interim group management reports is the responsibility
of the parent Company’s Board of Managing Directors. Our responsibility
is to issue a review report on the condensed consolidated interim financial
statements and on the interim group management report based on our
review.
We conducted our review of the condensed consolidated interim financial
statements and the interim group management report in accordance with
German generally accepted standards for the review of financial
statements promulgated by the Institut der Wirtschaftsprüfer (Institute of
Public Auditors in Gemany) (IDW) and additional observed the
International Standard on Review Engagements "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
(ISRE 2410). Those standards require that we plan and perform the review
so that we can preclude through critical evaluation, with moderate
assurance, that the condensed consolidated interim financial statements
have not been prepared, in material respects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU and that the
interim group management report has not been prepared, in material
respects, in accordance with the provisions of the German Securities
Trading Act applicable to interim group management reports. A review is
limited primarily to inquiries of company personnel and analytical
procedures and therefore does not provide the assurance attainable in a
financial statement audit. Since, in accordance with our engagement, we
have not performed a financial statement audit, we cannot issue an audit
opinion.
Based on our review, no matters have come to our attention that cause us
to presume that the condensed consolidated interim financial statements
have not been prepared, in material respects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU nor that the
interim group management report has not been prepared, in material
respects, in accordance with the provisions of the German Securities
Trading Act applicable to interim group management reports.
Without qualifying our review report, we draw attention to the disclosures
in "Discontinued operations: Steel Americas and Stainless Global business
areas" in Note 2 of the selected explanatory notes regarding the
measurement of the assets of the Steel Americas business area.
Essen, May 14, 2013
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Prof. Dr. Norbert Winkeljohann Volker Linke
(German Public Auditor) (German Public Auditor)
1st half 2012/2013 Responsibility statement 46
Responsibility statement
To the best of our knowledge, and in accordance with the applicable
reporting principles for interim reporting, the condensed interim
consolidated financial statements give a true and fair view of the assets,
liabilities, financial position and profit and loss of the Group, and the
Group interim management report includes a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal opportunities and risks
associated with the expected development of the Group in the remaining
months of the year.
Essen, May 10, 2013
ThyssenKrupp AG
The Executive Board
Hiesinger
Burkhard Kerkhoff
Further information 1st half 2012/2013 Report by the Supervisory Board Audit Committee 47
Report by the Supervisory Board Audit Committee
The interim report for the 1st half of the 2012/2013 fiscal year (October
2012 to March 2013) and the review report by the Group’s financial
statement auditors were presented to the Audit Committee of the Supervi-
sory Board in its meeting on May 14, 2013 and explained by the Executive
Board. The auditors were available to provide additional information. The
Audit Committee approved the interim report.
Essen, May 14, 2013
Chairman of the Audit Committee
Prof. Dr. Bernhard Pellens
Further information 1st half 2012/2013 Contact and 2013/2014 dates 48
Contact and 2013/2014 dates
Contacts Corporate Communications
Telephone +49 201 844-536043
Fax +49 201 844-536041
E-mail [email protected]
Investor Relations E-mail [email protected]
Institutional investors and analysts Telephone +49 201 844-536464
Fax +49 201 8456-531000
Private investors Infoline +49 201 844-538382
Fax +49 201 8456-531000
Address ThyssenKrupp AG
ThyssenKrupp Allee 1, 45143 Essen, Germany
P.O. Box, 45063 Essen
Telephone +49 201 844-0
Fax +49 201 844-536000
E-mail [email protected]
2013/2014 dates
August 14, 2013 Interim report
9 months 2012/2013 (October to June)
Conference call with analysts and investors
November 21, 2013 Annual press conference
Conference call with analysts and investors
January 17, 2014 Annual General Meeting
February 14, 2014 Interim report
1st quarter 2013/2014 (October to December)
Conference call with analysts and investors
May 15, 2014 Interim report
1st half 2013/2014 (October to March)
Conference call with analysts and investors
Forward-looking statements This document contains forward-looking statements that reflect management’s current views with respect to future events. Such statements are subject to risks and uncertainties that are beyond ThyssenKrupp’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. If any of these or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. ThyssenKrupp does not intend or assume any obligation to update any forward-looking statements to reflect events or circumstances after the date of these materials. Rounding differences and rates of change Percentages and figures in this report may include rounding differ-ences. The signs used to indicate rates of change are based on economic aspects: Improvements are indicated by a plus (+) sign, deteriorations are shown in brackets ( ). Very high positive and negative rates of change (≥1,000% or ≤(100)%) are indicated by ++ and −− respectively.
Variances for technical reasons To meet statutory disclosure obligations, the Company has to submit the interim report to the electronic Federal Gazette (Bundesanzeiger). For technical reasons (e.g. conversion of electronic formats) there may be variances in the accounting documents published in the electronic Bundesanzeiger. This English version of the annual report is a translation of the original German version; in the event of variances, the German version shall take precedence over the English translation. Both language versions of the interim report can be downloaded from the internet at http://www.thyssenkrupp.com. An interactive online version is also available on our website in both languages.
ThyssenKrupp AG ThyssenKrupp Allee 1 45143 Essen, Germany www.thyssenkrupp.com